Key investment trends revealed…

CAMRADATA’s latest Investment Considerations Survey reveals key investment trends

Emerging Market Equity is the number one asset class being considered by investors for the six months ahead, according to over 50% of asset managers, consultants and pensions schemes surveyed by CAMRADATA for its latest ‘Investment Considerations Survey’. Global Equity was the second most popular asset class and Diversified Growth Funds and Corporate Bonds were also selected by 40% or more respondents.

CAMRADATA’s latest six monthly Investment Considerations Survey was conducted amongst asset managers, consultants and pension schemes, who shared their considerations about investments, asset classes, asset allocation and financial markets for this year.

Sean Thompson, Managing Director, CAMRADATA said, “While Emerging Market Equity and Global Equity were selected by most investors, all asset classes are being considered to some extent right now including Private Equity, Private Debt, Infrastructure, High Yield Bonds and Japanese Equity and many others.”

So what issues will impact investment decision making in the next six months?

Top of investment concerns was the Low Yield Environment which the market continues to experience, followed by the Importance of Meeting Total Return Objectives – an issue that is high on investors’ agendas.

Thompson added, “Investors also appear to be more concerned about Protecting Capital and Economic Uncertainty than perhaps Market Volatility.

The uncertainty around Brexit, Trump’s leadership and the challenges of Optimising Market Performance and Balancing Risk over Return are also issues that will impact investment decision making.”

While Environmental, Social and Governance (ESG) is a hot topic in the asset management industry, more than half of consultants and investors did not expect asset managers to have integrated ESG into their investment strategy.

Thompson said, “Contrary to the views of investors and consultants, most asset managers have integrated ESG into their investment process. Some haven’t started but this might suggest it isn’t on the agenda for them yet or an issue they plan to look at in the future.

Investors are also divided about investing in ETFs, 38% would consider investing in them whereas 62% of investors wouldn’t invest in them or haven’t yet made up their minds. That said, only 19% of asset managers surveyed are offering this type of investing.”

In terms of interest rate rises over the next year, over 70% of respondents said they didn’t expect any changes in the UK or Euro interest rates, whereas 61% believe interest rates in the US will increase by 25bps over the same period.

Thompson concluded, “Most respondents are pretty neutral about the outlook for investments in the US, UK, European and Global financial markets over the next year. The financial markets have done nothing to incite positivity since our last survey. However, there appears to be slightly more optimism in the market especially with the European and Global financial markets, but equally slightly more pessimism with the UK and US markets.”

Download the full Investment Considerations Survey Report here