An economic environment of low-interest rates and loose monetary policy is having a profound impact on how investors throughout Europe are setting their investment strategies.
Central to this year’s European CIO survey is the question of how to find returns in a low interest rate environment. Analysing the views and concerns of 120 senior investors, ranging from smaller foundations and endowments up to large pension funds, reveals common challenges and unique insights.
The unique economic conditions that has greeted 2016, will raise new questions for European investors. Our survey clearly underscores the difficulties investors are facing in a world of very low and even negative yields on core fixed income. This context has opened up some fundamental questions:
What do investors regard as realistic targets for returns? Our surveyed investors would suggest that, over the short-term, traditional targets may have to be reconsidered.
Is the debate between passive and active management dead and buried? Our surveyed CIOs would suggest that both strategies have a place in different markets and specific situations.
How do investors expect asset allocation to change in 2016? With increasing interest in real-estate, infrastructure and private debt, what can we expect to see happen to public equities and fixed income?
And what is driving investor interest in liquid alternatives, hedge funds and co-investing?
2016 is going to be unique. The European CIO survey seeks to establish by how much.