Hedge funds struggle with risk-on/risk-off markets with no change in sight

Struggling with risk-on/risk-off

How do you intend to change your tolerance for risk over the next 12-18 months?

Jean-Marc Stenger, Lyxor Asset Management
To a large extent increased risk in financial markets is a reflection of higher economic volatility. The great recession has pushed forward the government sector and led to intense state intervention, triggering a shift to a more volatile environment.

Debt deleveraging forces are threatening to turn the favourable period of disinflation that started in the early 1980s into defl