Natixis Survey: Alternatives to 'Rule' in 2018

Dec 6 2017 | 6:53pm ET

Institutional investment managers expect greater volatility next year and nearly one in two fear that bubbles have formed in global equity and bond markets, according to a new survey from Natixis Investment Managers.

The company polled 500 global institutional investors responsible for more than $19 trillion of assets for retirees, governments, insurance companies and other institutions, according to a statement. 

Key highlights:

  • More volatility: 72% of respondents are surprised that volatility has been so low for so long, but they don’t think that trend will continue in 2018. 78% expect the stock market will be more volatile and 70% think the bond market will be more volatile next year.
  • Bubbles: 30% of respondents fear there is a stock market bubble and 42% believe there is a bond market bubble, while 71% say that both institutional and individual investors are assuming too much risk in pursuit of yield.
  • Biggest threats: Geopolitical events (such as North Korea or instability in the European Union) were seen as the greatest market threats. Next were asset bubbles and an increase in interest rates.
  • Active management continues to gain favor: 76% of respondents believe that 2018 will be more favorable for active management than passive management.
  • Sector picks for 2018: Technology (45%), healthcare (44%), and defense/ aerospace (43%) are predicted to outperform the market is 2018.
  • Alternatives rule: The biggest moves in the year ahead will be increased allocations to non-traditional assets, including private equity, private debt, real estate and infrastructure.  

Paris-based Natixis Investment Managers manages some $960 billion in assets. It is a subsidiary of Natixis, the international corporate, investment, insurance and financial services arm of France’s Groupe BPCE. 

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