The current heightened market uncertainty and ongoing volatility are favorable to active portfolios, said 81 percent of financial professionals in Singapore, who expect a high level of active exposure in client portfolios in the future.
On average, 63 percent of client assets in Singapore are in actively managed investments, and they intend to maintain that level of active exposure over the next three years, according to a Natixis survey of 2,700 financial professionals, including 150 in Singapore.
They said active management adds the greatest value to less covered asset classes like small-cap equity funds (63 percent) and emerging market funds (61 percent), as well as to ESG Investments (51 percent) and alternatives (49 percent).
«What we continue to see globally is still the desire for active management combined with an increased use of alternative strategies to help clients navigate these uncertain markets,» Dave Goodsell, executive director of Natixis’ Center for Investor Insight said.
ESG & Alternatives Popular
The survey also revealed that financial professionals are reevaluating investment assumptions and strategizing for more potentially uncertain markets and business scenarios.
More than one-third (35 percent) of respondents in Singapore said they were seeking more ESG-related investments, and 50 percent said they are more attractive in the current market environment, with 71 percent using them as a potential way to generate yield.
Within alternatives, 42 percent recommended the use of real assets, while 23 percent saw value in infrastructure investing.
Growth Opportunities
Despite the Covid-19 pandemic, financial professionals still anticipate growth opportunities even if the path to profitable growth isn’t likely to follow the status quo.
Respondents said they expect to see their assets under management increase by 1.6 percent over the next 12 months, with annualized growth of 8.2 percent over the next three years.
They believe this growth will be driven by new assets from current clients (73 percent) and new assets from new clients (65 percent), with only 40 percent counting on market returns as a primary growth driver.
