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Bailey McCann, Opalesque New York: Anticipating higher levels of volatility and low yields, the vast majority of professional fund buyers, including discretionary portfolio managers and fund of funds, favor active management and alternative investments for alpha generation, according to a new survey by Natixis Global Asset Management that covered professional fund buyers in 28 countries across the Americas, Europe, the Middle East and Asia. The survey revealed that wholesale buyers expect geopolitical events (67%), interest rates (49%) and China market woes (36%) will be the top three sources of volatility for 2017. The low-yield environment tops the list of risk management concerns (77%).
Professional buyers believe that higher levels of market volatility are likely to result in greater dispersion in equity returns. Nearly all of those surveyed (95%) said they would choose active management over passive investments for generating alpha, while active management is also the preferred route to gain exposure to non-correlated asset classes (74%) and emerging markets (77%). Respondents favored passive investments for minimizing management fees.
Although professional buyers anticipate greater volatility in the year ahead and are concerned about investors taking on too much risk, they are not shying away from adopting risk, which is reflected in their market outlook and asset allocation calls. Professional fund buyers are resetting strategy to ensure they are positioned...................... To view our full article Click here
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