After a decade of low interest rates, low volatility, and high investment returns, professional investors and institutional decision makers foresee plenty of risk on the horizon including geopolitical uncertainty, potential market spikes and asset bubbles, and the specter of rising interest rates.
In order to be better positioned for a changing market, respondents in the 2017 Natixis Global Survey of Institutional Investors appear to be making adjustments to allocation plans rather than a wholesale shift in portfolio strategy. Key investment trends include:
- Active management: Institutions demonstrate a clear preference for actively managed investments and continue to allocate the majority of assets to these strategies.
- Regional diversification: On the heels of double-digit returns for the S&P 500 in 2017, institutional investors are betting on Europe and Asia as growth drivers for 2018.
- Alternative investments: Low yields have institutions looking for fixed income alternatives and in many cases focusing on the higher return potential of private markets.
For the full findings on their outlook for 2018, download the complete report.