Global institutional investors are increasingly steering towards boosting returns for their clients, after years of trying to stave off high volatility and market uncertainty, the AMP Capital Institutional Investor Report reveals.
The survey of 56 investors around the world showed respondents, who manage US$1.9 trillion together, said increasing returns stood at the top of the list (46 per cent), followed by curbing volatility (37 per cent), and cutting risk overall (31 per cent).
Almost half said using non-market driven strategies like absolute-return and inflation-plus instruments would be helpful in boosting returns (48 per cent) and reducing portfolio risk (52 per cent) over the next 12 months.
Investors will also look to increasing allocations to liquid or illiquid alternative assets to boost returns (46 per cent) or curb risk (33 per cent).
"The majority (41 per cent) of those surveyed said that it would take their schemes three to
four months to decide to change asset allocations and to develop a strategy to implement that change," AMP Capital chief executive international and head of global clients Anthony Fasso said.
"However, 35 per cent said that it would take more than six months to do so. This is concerning as it implies that more than a third of schemes are not able to react quickly to market volatility."
Only 15 per cent of those surveyed said it took between one and two months to apply all the changes to asset allocations.
The survey found 44 per cent of asset re-allocation would likely be taken care of internal investment teams, while 19 per cent will be looked after by third-party investment advisers.
The respondents were from North America, Europe, and the Asia-Pacific region (including Australia and Japan).
