Staying active: how to regain
trust in active management
Those were among the questions we set out to explore when we commissioned Oxford Economics to survey 490 institutional investors globally in November and December 2018.
The case for active asset management always grows clearer towards the end of a market cycle. As volatility increases, gains are harder to come by, and the discomfort of riding a turbulent index can add to uncertainty about the future.
But while the majority of investors recognise the benefits of active management, many remain unconvinced that these benefits are worth their current cost – even as market conditions become more complex.
Our research explores why investors are sceptical. It also does something practical: by identifying where investors need support today, we show how asset managers can restore trust and make the case for active management. Below you can explore key takeaways from the research or you can download the full report.
Alternative investments have also become a fixture in many portfolios. Asked to rank the most important reasons to invest in alternative assets, 57% of respondents cite diversification, and 44% cite higher returns than conventional debt or equity investments.
Overall, 48% plan to boost their alternatives allocations over the next three years, rising to 65% of insurance companies surveyed.
Percentage selecting as one of top three reasons for investing in alternative assets. Source: Allianz Global Investors 2019 Institutional Investor Survey
As institutions increasingly look to alternatives to improve portfolio efficiency, active managers can shine by helping investors manage risks, prepare for regulatory shifts and understand how these often-complex strategies work.
Overall, managers with a full arsenal of strategies will be best equipped to address wide-ranging investor requirements.
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Study methodology
- Allianz Global Investors commissioned Oxford Economics to conduct telephone surveys of 490 institutional investors, including insurers, public and private pension plans, sovereign wealth funds, family offices, foundations, endowments and banks, in 13 markets worldwide.
- Oxford Economics selected respondents across markets and institution types that reflect our client base. Respondents represent total assets under management exceeding USD 15 trillion.
- Respondents may include Allianz Global Investors clients, but clients were not specifically targeted so any such overlap would be coincidental.
- The survey was fielded anonymously in November and December 2018. The 490 respondents were split as follows:
| Region | AuM | |||
|---|---|---|---|---|
| Europe | 56% | USD 100 billion – USD 500 billion | 17% | |
| Asia Pacific | 24% | USD 25 billion – USD 99.9 billion | 16% | |
| US | 14% | USD 10 billion – USD 24.9 billion | 10% | |
| Middle East | 6% | USD 5 billion – USD 9.9 billion | 8% | |
| USD 1 billion – USD 4.9 billion | 15% | |||
| USD 500 million – USD 999 million | 20% |
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| < USD 500 million | 14% | |||
Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Environmental, social and governance (ESG) strategies consider factors beyond traditional financial information to select securities or eliminate exposure which could result in relative investment performance deviating from other strategies or broad market benchmarks. Diversification does not ensure a profit or protect against a loss. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.
The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.
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