Volatility in the market has spiked due to the latest Greece crisis, but it has been fairly muted in recent months. Sam Richmond Brown, portfolio manager for the Natixis Seeyond Multi Asset Allocation Fund, expects the VIX, or the so-called fear index, to make a comeback in the coming months as the Federal Reserve attempts to sop up the liquidity it injected into the system during the financial crisis. ‘There is still a lot of stimulus in the system,’ said Brown. ‘Going forward some of that is retracted from the U.S. and as things do diverge both from a monetary policy stand point and also growth standpoint, we would expect, logically, the VIX to increase back to its historical levels because it’s obviously well below that currently.’ The VIX spiked above 18 this week after spending most of 2015 below 14. The Natixis Seeyond Multi Asset Allocation Fund, down nearly 1% so far this year, invests in volatility as an asset class in order to manage risk or generate a non-correlated source of return. But while he expects the ride to be bumpy and advises that investors protect themselves, Brown is still constructive on stocks. ‘We think there’s light at the end of the tunnel,’ said Brown.
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