Despite a boost in optimism following the approval of Covid-19 vaccines towards the end of 2020, six out of ten fund selectors believe that the ‘new normal’ is here to stay, a survey by Natixis Investment Managers has found.
With heightened risk expected for the year ahead, two thirds of the 400 global fund selectors surveyed also predict that the global economy will not recover from Covid in 2021.
However, regardless of concerns over Covid-19 and political issues, 80% believe central banks will support the market in the event of a downturn, according to the report.
According to respondents, volatility and negative rates were considered the first and second top portfolio risks for global fund buyers in 2021, at 49% and 39% respectively, while a credit crunch was also cause for concern.
Against this backdrop, 66% of the fund selectors believe that aggressive portfolios will outperform their defensive counterparts.
Matt Shafer, EVP, head of wholesale and retail distribution at Natixis IM, said: “2020 marked a year of extreme challenges for markets that went beyond the health pandemic, including climate events and natural disasters, political tensions and the fastest market correction in history.
“Uncertainty continues and concerns are mounting that financial markets may have entered bubble territory. However, fund selectors surveyed view market risk as an opportunity, while acknowledging close analysis is required to uncover the opportunities to generate alpha for clients.”
Over half of the respondents, who represent a combined total of $12.7 trillion (€10.5 trillion) in assets, also said that emerging markets are looking more attractive post-Covid.
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