​The Next Macro Event Could Prove Too Much For Structurally Fragile Markets

Another macro event, similar to what was seen surrounding China in August, could break what is already a structurally fragile market. Although increased regulation and market structure rules have the intention to prevent another flash crash or Black Monday, the combination of quantitative easing, increased structured product flow and the rise of short volatility exchange-traded products, among other factors, is driving increased market fragility. As dislocations increase, it emphasises the need to have active management of volatility risk to add value to a portfolio.