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Alternative Market Briefing

Institutional investors grow cautious in the face of economic headwinds

Wednesday, March 30, 2022

Bailey McCann, Opalesque New York:

Institutional investors are beginning to worry about where the economy is headed, according to a new survey from Commonfund.

Investors were surveyed at Commonfund's annual event - Commonfund Forum. Responses were gathered from over 150 investors, representing $170 billion in total assets.

When asked about their expectations for U.S. stock market returns in 2022 versus the 10-year average annual return for the S&P 500 Index, 78 percent of investors believe this year's returns will be lower than average, an increase from last year, when 58 percent of investors believed this would be the case. 14 percent of investors expect returns to be about the same, while only 3 percent expect that they will be higher. Investors aren't quite expecting a recession, but the combination of factors impacting the market at this time are likely to keep putting downward pressure on returns.

Inflation and the conflict in Ukraine were cited as primary concerns for this year. "The effects of geopolitical tensions are understandably leading investors to closely analyze the future of the global economy and what they mean for their portfolio allocations as the tragic conflict in Ukraine remains top-of-mind," said Mark Anson, CEO and CIO of Commonfund.

Investors indicated that they plan to stick to target allocations at least over the near term. Against this backdrop, investors are looking to allocations to alternatives to help smooth out retu......................

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