representativeness
It is worth noting that the already traditional NIM survey polled on this occasion more than 440 fund professionals who manage more than 30 trillion dollars in total client assets, coming from the main wealth management, private banking and insurance platforms around the world. the world. When asked about 2023, 70% said that inflation was the main concern when making investment decisions, while 63% pointed to interest rates. In this sense, 52% maintained that a potential error on the part of central banks is positioned as the greatest economic risk.
Although the professionals consulted consider that inflation is a key risk of the portfolio, they also see a potential opportunity in the increases in interest rates that come with it: thus, 75% believe that the increase in interest rates will lead to a resurgence of traditional fixed income, with more than 50% saying they will increase their investments in public debt, and another 46% that they will increase their allocations to investment grade companies.
On the equity side, respondents appear to be relatively bullish on 2023 as they seek to shift the weighting of equities to capture the bullish side of market disruptions: almost 60% are bullish on equities, which is 9% more than institutional investors surveyed a month earlier.
Alternatives
These investment fund managers also plan to mitigate risk through the continued use of alternatives. Thus, almost six out of ten state that they recommend increasing the allocations in alternative investments due to the higher levels of risk. Risk sentiment is so strong that 63% say they believe alternative investments should be part of retirees’ portfolios to help mitigate their exposure. Among the alternatives, infrastructure allocations are the most likely to increase (48%), followed by private equities (43%), absolute return strategies (32%) and private debt (31%). In this regard, 64% believe that portfolios made up of 60% variable income, 20% fixed income and 20% alternatives will exceed the traditional 60:40 portfolio in 2023.
Despite all the macro and geopolitical panorama, it cannot be ignored that the managers consulted remain optimistic with 2023, since 73% affirm that they will maintain or increase their average return forecasts, which stand at almost 9%. The consensus showed that they will not need to make major changes in the portfolio strategy to achieve return expectations, and they only plan small but significant movements in allocations to navigate this uncertain 2023. We will see.
Source: Ambito
