Geopolitical tensions, market concentration and concerns over global growth are prompting investors to rethink traditional portfolio construction and increase focus on diversification, according to Schroders’ Global Investor Insights Survey 2026.
The findings, based on responses from institutional investors, wealth managers and intermediaries, found that 85% of investors expect market volatility to increase over the next 12 months.
Conflict in the Middle East emerged as the top concern, according to 69% of respondents. Uncertainty around US foreign policy and global leadership stood at 67%. Commodity and energy price shocks, geopolitical escalation and economic slowdown risks also came up as threats to portfolios.
Around 84% of investors said diversification was a focus, while 83% highlighted downside protection. Nearly half reported increasing geographic diversification beyond the US.
Some 85% of respondents said they were confident active strategies could help them achieve investment objectives over the next 12 to 18 months. 38% said they were increasing allocations to active management specifically to reduce concentration risk associated with market-cap weighted indices.
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Investors cited diversification benefits, tactical portfolio positioning and risk management as key reasons for using active ETFs. Lower costs compared with traditional active mutual funds were picked as the main attraction by 70% of respondents.
Half of the respondents said they now assess public and private equity opportunities together rather than separate allocation frameworks. Active fundamental equities, small and mid-cap strategies, buyouts and private equity were viewed as drivers of long-term growth.
Investment grade corporate bonds were seen as attractive for dependable income by 55% of investors, while high yield bonds, emerging market debt and distressed credit were viewed as sources of alpha generation.
Equity income, government bonds, corporate bonds, high yield debt and asset-backed credit ranked closely.
