From asset bubbles to interest rate increases to low yields, the Natixis Global Survey of Institutional Investors reveals their top concerns – and how they seek to meet average long-term return assumptions of 7.2%.

1. Institutional investors are looking for opportunity in the uncertainty

What will impact investment performance in 2018?
(% who said negative impact)

Percentage of institutional investors who think geopolitical events will have a negative impact on investment performance: 74%  Percentage of institutional investors who think asset bubbles will have a negative impact on investment performance: 65%  Percentage of institutional investors who think interest rate increases will have a negative impact on investment performance: 61%  Percentage of institutional investors who think a low yield environment will have a negative impact on investment performance: 54%   Percentage of institutional investors who think unwinding quantitative easing will have a negative impact on investment performance: 53%

 

Active investments are on the rise
Institutional investors have been upping allocations to active investments for the last three years in anticipation of market volatility – a trend that looks likely to continue1.
Active Investments    Passive Investments

2015 survey showing the difference in allocations of active investments versus passive investments in percentages      2016 survey showing the difference in allocations of active investments versus passive investments in percentages
2017 survey showing the difference in allocations of active investments versus passive investments in percentages

And so are alternatives
The majority of institutional investors are also looking to alternative investments to diversify, help manage mounting risks, and pursue potential returns.

7 in 10 institutional investors say alternative investments are essential to diversify portfolio risk graphic

See how institutions are using specific alternative classes. Download the report.


2. Risk management is in the spotlight again

With market volatility back in the picture, institutional investors are employing a range of strategies to help manage risk.

84% of institutional investors diversify across sectors to manage risk. 81% of institutional investors risk budget to manage risk. 78% of institutional investors increase the use of alternative investments to manage risk.74% of institutional investors currency hedge to manage risk.

64% of institutional investors use smart betas to manage risk.   46% of institutional investors integrate material esg factors to manage risk.   40% of institutional investors increase allocations to fixed income to manage risk.

Learn more about how institutional investors are managing risk. Download the report.


3. Regulatory controls are still top of mind

Institutional investors are still grappling with the impact of tighter regulatory controls – though it’s getting easier. Fewer institutional investors say complying with new regulations is a challenge.

2015 80percent  2017 68percent250h

Many institutions are looking to hire or outsource the specialized talent needed to fully deliver on investment expectations.

Graphic showing the percentage of institutions interested in outsourcing or hiring specialized talent for various investment expectations.

Get deeper insight into how institutions are approaching regulatory challenges and outsourcing. Download the report.


Read the full Report

The Natixis Investment Managers Global Survey of Institutional Investors was conducted by CoreData Research in September and October 2017. The survey included 500 institutional investors in 30 countries. Get the whole story.

Natixis Investment Managers, Global Survey of Institutional Investors conducted by CoreData Research, October 2015. Survey included 660 institutional investors in 29 countries. Natixis Investment Managers, Global Survey of Institutional Investors conducted by CoreData Research in October and November 2016. Survey included 500 institutional investors in 31 countries.

Natixis Investment Managers, Global Survey of Institutional Investors conduct­ed by CoreData Research in September and October 2017. Survey included 500 institutional investors in 30 countries.

Diversification does not guarantee a profit or protect against a loss.

Alternative investments involve unique risks that may be different from 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.

2024124.1.2