lighthouse

Ready. Steady. And Waiting.
From volatile equity and fixed-income markets, to higher interest rates and a global economic environment punctuated by trade and geopolitical tension, professional fund buyers see volatility and uncertainty ahead in 2019.

Enough so that they’ve reduced their long-term rate-of-return assumptions to an average of 7.7% from 8.4% last year. But our recent survey reveals that they’re confident they can handle this year’s challenges.

So, what are their specific concerns? And how are they preparing?

5 key expectations and concerns for professional fund buyers in 2019

interest 78
Higher interest
rates

78%

equities 83
Greater volatility
in equities

83%

disputes 78
Trade
disputes

78%

bubbles 75
Growing speculative bubbles

75%

bull-market 63
An end to the
US bull market

63%

Get more detail on what professional fund buyers are watching in 2019. Download the report.

Looking to the future

Active management
74% of professional fund buyers say the current environmental is favorable to active management. Almost three-quarters of portfolio investments are actively managed. Pro buyers believe this will remain relatively constant into 2022. It features prominently in portfolio plans.

allocations-today3 years from nowkey

 

ESG Investing
Half of professional fund buyers say ESG factors are important in their organization’s current manager selection process, and more than half of those surveyed contend that there is alpha to be found in ESG investing.

globe

Two-thirds say they will increase their
allocation to ESG strategies in 2019

turbine

Two-thirds say including ESG factors will be standard practice for all investment managers within five years

 

Portfolio Allocations
Despite their concerns, professional fund buyers around the world are staying the course – and have been for the past few years. For 2019, they are planning to make relatively small changes across asset classes.

 

 

Equities

Fixed Income

Alternatives

Cash

Other

20171 43.6% 32.5% 13.7% 6.0% 4.2%
2018
(current)
44.2% 31.9% 14.6% 6.6% 2.1%
2019 43.0% 31.7% 15.8% 7.1% 1.6%

Learn more about professional fund buyers are facing market challenges in 2019. Download the report.

While professional fund buyers are holding allocations steady, they anticipate meaningful changes within asset classes.

Charts

Read more about how professional fund buyers may tweak their asset allocation in 2019. Download the report.


Professional fund buyers are prepared for what might be coming in 2019. They are selectively using alternative investments to meet their clients’ needs for growth and safety, as well as continuing to rely on the performance potential of active management. To learn more about the unique challenges this group is facing, download the survey report.

About the professional fund buyer survey
The Natixis Investment Managers Global Survey of Professional Fund Buyers was conducted by CoreData Research in October and November 2018. Survey included 200 respondents in 22 countries throughout North America, Latin America, the United Kingdom, Continental Europe and the Middle East.

The professional fund buyers in the survey are researchers and analysts responsible for the fund selection process for a variety of institutions, including funds of funds, private banks/bank trusts, the investment division of insurers, RIAs/independent wealth managers, and turnkey asset manager providers/DFMs.

1 The Natixis Investment Managers Global Survey of Professional Fund Buyers was conducted by CoreData Research in September and October 2017. The survey included 200 respondents in 23 countries.

Unlike passive investments, there are no indexes that an active investment attempts to track or replicate. Thus, the ability of an active investment to achieve its objectives will depend on the effectiveness of the investment manager.

Sustainable investing focuses on investments in companies that relate to certain sustainable development themes and demonstrate adherence to environmental, social and governance (ESG) practices; therefore the Fund's universe of investments may be reduced. It may sell a security when it could be disadvantageous to do so or forgo opportunities in certain companies, industries, sectors or countries. This could have a negative impact on performance depending on whether such investments are in or out of favor.

Alternative investments involve unique risks that may be different than those associated with traditional investments, including illiquidity and the potential for amplified losses or gains. Investors should fully understand the risks associated with any investment prior to investing.

This material is provided for informational purposes only and should not be construed as investment advice.

All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Natixis Distribution, L.P. is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.

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