Natixis Global AM survey: Investors are confident but cautious
The Natixis 2013 Global Survey of Institutional Investors gives insights on
risk, investing and alternative strategies.
Plan for the best, and prepare for the worst seems to be institutional investors’ motto, according to the 2013 Global Survey of Institutional Investors from Natixis Global Asset Management (NGAM).
While most investors said they are comfortable with their overall risk management approach, they also said they understand that it’s impossible to plan for every contingency, NGAM’s survey showed.
According to the survey results, one of the key lessons learned from the crisis is that risk management strategies need to be dynamic and flexible, and most investors have made significant changes to their approaches over the last several years.
However, many of the more than 500 investors surveyed are not sure how their portfolios will stand up to severe market fluctuations or to rising inflation – and all have concerns about generating returns in a low-yield environment.
More importantly, they are not sure what else they can do on the risk management front to safeguard their assets and many are on the hunt for new asset allocation and portfolio construction strategies.
Confident in meeting liabilities, concern for individuals
In terms of meeting future liabilities, virtually all investors surveyed said they are confident that their institutions will meet their obligations – but not without some bumps in the road over the next few years.
Equities rule the roost
On the investing front, the Natixis survey suggests that expectations are high for equities, with institutional investors displaying a particular fondness for global stocks and a decreased appetite for bonds and gold.
Alternatives are in favour as well, with many investors increasingly turning to
these investments to help diversify portfolio risk, as determined by standard deviation. Most plan to bump up their exposure to alternatives in 2013, and believe these investments will perform well, the survey also highlighted.
When it comes to evaluating risk management strategies, many institutions said they have conducted thorough analyses of their own risk management strategies and processes over the last five years, with seven in ten reporting that they have made changes to their overall framework.
More recently, a smaller percentage (21%) have instituted similar changes in the last 12 months, which suggests investors feel their previous adjustments have been effective.
A point supporting this theory is that 65% say they are more confident in
their risk approach than they were a year ago, including 85% of US investors who say their overall confidence level is up.
The decrease in activity over the past year could also be due in part to stabilised market conditions around the globe.
To read the full report click here: 2013 Global Survey of Institutional Investors