Fund managers believe lack of understanding by clients about derivatives, the rapid growth of credit default swaps and collateralised debt obligations, and the potential for mis-selling by investment banks of complex structured products are the biggest risks facing the derivatives markets, according to a survey compiled for Financial News.

The respondents, representing 100 of the largest European asset management companies, said the threat of a blow-up in the market for complex structured credit products had increased in the past year.