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Understanding the VIX: Navigating Market Volatility

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In recent weeks, financial markets have experienced extraordinary levels of volatility, as reflected by the VIX, or Volatility Index. On 5th August 2024, the VIX spiked above 65—a level it has only reached a handful of times this century. To put this into perspective, a VIX reading below 20 typically indicates stable markets, while a reading above 30 signals heightened investor anxiety, often during market corrections, crises, or significant geopolitical events. A VIX measure above 40 is considered extreme, so the recent peak at 65 highlights just how turbulent the market conditions have been.

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Market Update, August Volatility

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Monday 5 August saw a global sell off across risk assets, led by losses in Japan and the wider Asia region. The Japanese stock market saw one of the largest impacts, with the Tokyo Stock Price Index (TOPIX) closing the day down 12%, its largest single day fall since the “Black Monday” crash of 1987. This contagion spread to other Asian markets, as well as into Europe and the US, with the S&P 500 Index falling over 2%, and the VIX index (measuring the implied volatility on S&P500 options) rising to its highest value since the covid-crash of 2020.

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Reports of ESG’s death are greatly exaggerated

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With apologies for borrowing from the late great Mark Twain… our latest blog outlines our thoughts in relation to reports of the alleged ‘death’ of ESG, including looking into the history of ESG, where some of these claims are coming from, the motivation behind them, and where things stand as we look forward.

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Do Political Events Impact Financial Markets?

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In May, Prime Minister Rishi Sunak announced a general election would be taking place on 4th July 2024, the first summer election to be held in the UK since 1945. At the time of writing, the Labour party are predicted to win around 42% of the vote, with the Conservatives standing on 21%, suggesting a strong chance there will be a new majority in parliament next month, and a new Prime Minister in Downing Street. 

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Is there an AI bubble?

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In May 2024, tech giant Open AI announced its latest model, GPT 4o (“four-oh”). Videos of the large language model (LLM) tutoring mathematics, translating conversations between multiple languages, and orchestrating games of rock, paper, scissors quickly spread online, and the internet lit up with chatter as people were blown away and creeped out in equal measure.

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All that glitters…

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As gold has reached new all-time highs and is making headlines once again, the question on some investors’ minds is whether there is a role for an allocation to this precious metal as part of a wider investment portfolio. In the following post we outline ebi’s views on this topic.

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The Problems with Property

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Introduction The last couple of weeks have seen further pain in the UK open-ended property fund market. On 19th October, fund manager M&G announced that it would be closing its £565m Property Portfolio fund, due to “declining retail investor interest across this fund structure”. This means that daily dealing into and out of the fund has been halted, and the fund will enter the winding-up process – selling underlying assets and returning the AUM remaining…

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