Voya managers are also keeping an eye on the politics in Iraq. “We would most likely sell a broad range of equity markets, with the emerging markets facing the largest reduction if the situation in Iraq worsened,” Zemsky said.
Domestically, Voya managers are anticipating an overreaction to a possible hike in interest rates.
“The equity market will most likely overact when the Fed indicates that they are raising rates and sell off,” Zemsky said. “We would probably view this as a buying opportunity. Bond prices will also fall but we don’t see compelling value developing in the bond market for a long time.”