Second wave of Covid-19 biggest tail risk for markets: BofA Securities

Despite the sharp recovery seen since March lows, 68 per cent of the fund managers surveyed believe that equities are in a bear market rally.

The second wave of Covid-19 is the biggest tail risk for the markets with 52 per cent of the fund managers surveyed by BofA Securities in May agreeing to the possibility. Permanently high unemployment, the break-up of the European Union (EU), and systemic credit event are the other tail risks cited. Vaccine breakthrough, the survey findings suggest, was the most likely V-recovery catalyst.

A total of 223 panelists with $651 billion worth of assets under management (AUM) globally participated in the survey between May 7 and May 14, BofA said.