Disconnect between return expectations for clients
Fund selectors foresee an “uphill battle” navigating the current market environment thanks to rising inflation, according to Natixis Investment Managers
According to the latest statistics from Natixis Investment Managers (Natixis IM), fund selectors foresaw a “difficult market landscape” as a result of high inflation, central banks withdrawing stimulus and clients’ expectations of returns.
Respondents were expecting to see long-term returns of 7.8%, up from 7.1% last year, but this was far below client expectations of 14.5%.
Louise Watson, country head of Natixis IM for Australia and New Zealand, said: “Investors are expecting an uphill battle amid volatility caused by the pandemic, rising interest rates, and inflation. For this reason, we're seeing a host of investors from superannuation funds to family offices look to longer-term investment options such as private equity. This is a trend that's been prevalent since the beginning of the pandemic and has recently been spurred on by the correction we've seen across asset classes.
“In Australia, it's no surprise that environmental, social and governance (ESG) will remain a focus and investors will look to make "green" allocation changes. For example, interest in green bonds continues to rise amongst local clients with Mirova being a leader in the industry for this.”
Over three-quarters of fund selectors said their firms were already actively investing for ESG impact or considering it while over half said the demand for ESG was influenced by social and environmental issues.
AUTHOR
Laura Dew
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