Institutional investors and wealth managers are turning toward active management as global economic and geopolitical uncertainty intensifies, according to Schroders’ latest global investor insights survey.
The survey, which gathered insights from nearly 1,000 institutional investors and wealth managers, found that 80% of respondents are somewhat or significantly more likely to increase their use of actively managed investment strategies in the year ahead.
This shift comes amid heightened market turbulence following the US government’s introduction of wide-ranging trade tariffs earlier this year, according to the researchers. These tariffs have emerged as the most pressing macroeconomic concern, cited by 63% of investors—more than six times the next highest concern. The uncertain trade environment appears to be fuelling a clear prioritisation of ‘portfolio resilience’, which was selected as the top focus by 55% of survey participants.
Among those who prioritised portfolio resilience, 82% indicated increasing reliance on active management. The ability to capture specific investment opportunities (52%) and the flexibility to navigate risks (48%) were cited as the most valued attributes of active strategies.
Public equities (46%) and private equity (45%) are viewed as the most attractive asset classes in the current landscape, according to the findings. Within public equities, more than half of respondents (51%) believe global equity allocations will outperform, marking a move to diversify away from US mega caps. This is underscored by the fact that 74% identified the S&P 500 as the index posing the greatest concern due to concentration risk. 53% of those focused on public equities favour active strategies, compared to only 10% opting for passive approaches.
In private equity, 65% of investors highlighted small-to-mid cap buyouts as the most compelling opportunity, reflecting a preference for high-conviction investments with transformative growth potential. These segments are also seen as more insulated from geopolitical tensions and trade-related disruptions.
Institutional investors expand private market allocations
Investors are increasingly moving beyond traditional fixed income, favouring a broader mix of risk-adjusted, multi-channel sources, according to the findings. Private debt and credit alternatives (PDCA) emerged as the most popular allocation choice for income, selected by 44% of investors, followed by high-yielding equities (41%) and active public corporate bonds (33%).
Within PDCA, infrastructure debt (63%) and securitised products (60%) were identified as key alternatives to direct lending. Among wealth managers who favoured PDCA, securitised products were ranked as the most attractive source of risk-adjusted returns (64%), followed by infrastructure debt (60%) and direct lending (56%). Institutional investors, by contrast, placed direct lending at the top (73%), ahead of infrastructure debt (64%) and securitised products (58%).
Johanna Kyrklund, group chief investment officer at Schroders, commented: “Active management is indispensable amid today’s fragmented markets. With four in five investors set to increase their allocation to actively managed strategies this year, it’s clear they value a selective and adaptable approach.
The wider backdrop is that financial markets are still adjusting back to structurally higher interest rates, made painful in many cases by high levels of debt. This is raising questions about future market trends and the value of passive approaches in a period of greater uncertainty.
Resilience now tops the investment agenda, as the rising tide no longer lifts all boats. In this environment, active strategies provide the control investors need to manage complexity, create portfolio resilience and seize opportunities.”
Kyrklund added: “Investors are increasingly focused on resilience. They are seeking strategic returns through diversified global equities and specialist, conviction private equity. Meanwhile, their search for income is evolving, with greater emphasis on multi-channel, risk-adjusted sources like infrastructure debt and securitised credit. In this context, it is clear why investors are turning to active management and a blend of public and private markets.”
