Characterised by low interest rates for credit and low yields for debt instruments, the past year as well as 2016 were not very fruitful for institutional investors (especially insurers and credit institutions), reason for which professionals who offer financial products have been searching for financial assets with higher returns (see article here).
A recent study conducted by Natixis IM assesses the global financial forecast, in an attempt to find out trends and risks for 2018, by surveying institutional investors around the world. The study, covering 500 asset management companies administering over $19bln worth of assets, found that the main risks for investments are geopolitical instability, financial bubbles and the toughening of monetary policies (according to Les Echos).
Nevertheless, from the professionals surveyed, the majority believe that 2018 will bring the end to a decade of low interest rates, high volatility and high investment returns.
The study also reveals that institutional investors will look to make placements in less liquid assets or private debt, with the aim of moving trade more towards technology, healthcare, and aviation defence. The study concludes that the general environment will favour active management strategies.
Read here:
- Les Echos article.
- BETTER FINANCE article: The Current Investment Climate: The Calm before the Storm?