Wealth managers look to active management for outperformance potential

Wealth managers believe active management offers diversification and outperformance potential, according to Schroders. 

The majority of institutional investors and wealth managers plan to increase their use of actively managed investment strategies in the year ahead as economic uncertainty continues to grow, according to the Schroders’ flagship 2025 Global Investor Insights Survey.

The survey, which spanned nearly 1,000 institutional investors and wealth managers globally, found 80 per cent of global investors are somewhat or significantly more likely to increase their use of actively managed investment strategies over the next year.

Among Australian investors, this proportion was slightly higher at 84 per cent, with 77 per cent confident that active management will deliver value in the new investment landscape.

The top factors contributing to this confidence include the opportunity to capture outperformance at 62 per cent, seeking specialist approaches and exposures at 62 per cent, and harnessing nimbleness to navigate uncertainty at 48 per cent.

For wealth managers, the three factors they value most from the active managers they work with are the ability to capture opportunities, enhanced portfolio resilience over the long term, and deep technical and specialist knowledge. 

Looking at where they expect to generate income over the next 12 months, 49 per cent of wealth managers said from high-yielding equities, 43 per cent from allocations to private debt and credit, and 35 per cent from public corporate bonds. 

This high ranking for high-yielding equities by wealth managers provides further evidence of “the search to have a diversified portfolio of risk premia for income generation”, it said.  

Schroders Australia chief executive officer and chief investment officer, Simon Doyle, said investors have a clear focus on outperformance, specialist strategies, and navigating uncertainty at the moment.

“Investors are prioritising adaptability, while raising questions about the value of passive approaches in periods of greater unpredictability and future market trends,” said Doyle.

“Against the backdrop of trade and geopolitical uncertainty, investment priorities have shifted, with resilience now front of mind. Since broad market gains can no longer be taken for granted, active strategies are playing a crucial role in helping investors manage complexity, build resilience within portfolios, and identify compelling opportunities.”