The team strives to build a broad list of approved funds so that the group’s investment managers have reasonable choice and can shape portfolios for their clients as they see fit. He wants the list to be ‘all weather’, incorporating large groups, boutiques, global, active or benchmark-driven funds.
As to what keeps him awake at night, he says he sleeps relatively well, but his big concern is how markets react to the normalisation of interest rates.
He says: “Apart from the Bank of Japan, the Bank of England, Federal Reserve and European Central Bank all want to normalise interest rates. They have moved from being behind the curve, to being – potentially – ahead of the curve. In the UK, for example, it is clear that deleveraging is still happening and there are issues in the banking sector.
“There is a fear that in a desperate rush for normalisation, the central banks will move faster than the market.”
However, Summers admits that it is possible to make the alternative case, that central bankers are being too slow and risking inflation.
“If we were really worried, we wouldn’t be neutral on risk, but there is scope for policy errors.”
In the meantime, global growth ticks higher and allows a relatively positive outlook. It is not time to batten down the hatches just yet.
