Investment consultants, institutional asset owners and intermediaries worldwide forecast significant fixed income restructuring this year amid concern about rising interest rates and a jump in real assets investing, according to a survey.
The 2014 Global Investor Survey from Casey Quirk and eVestment shows that there will be a significant realignment of fixed income portfolios, with 48% of all participants expecting to restructure them—in particular, as corporate pensions continue to adopt liability-driven investing and rate-concerned investors delink their portfolios from interest rate-sensitive strategies.
Other key findings from the survey indicate the following:
- the rising interest rate environment was the biggest concern among all respondents, with an average of 53% citing this as a major concern;
- there is a growing appetite for real assets as asset owners continue to diversify their alternatives portfolios;
- the implementation of outcome-oriented investing will grow as the asset allocation and buying behaviour of investors continue to diverge at an accelerating pace; and
- there will be a continuation of the long-term trend away from home country-biased portfolios, driving the need for global data and analytics.
“The survey findings indicate that, to be successful, fund managers will have to become adept at meeting the needs of asset owners seeking specific solutions, elevate their fixed income game and shift more rapidly to offering a globalized investment framework that incorporates both traditional and alternatives skills,” says Jeffrey Levi, director at Casey Quirk.
Responding to the survey were more than 65 investment consultants worldwide and more than 135 institutional investors globally. More than 40% of the survey respondents were located outside of the United States.