2020 Institutional Rebalancing Survey

2020 Institutional Rebalancing Survey

We surveyed 271 institutional clients across the globe, representing over US$9.8 trillion in investible assets, to discover how they plan to rebalance assets in 2020. Explore the results below.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.


How are institutions adjusting their portfolios in 2020? 

In our annual rebalancing survey, we asked clients how they intend to allocate capital across and within asset classes, and about the macro factors that are driving those decisions. For this year’s survey, we also asked questions around ESG adoption and the challenges of allocating capital to private markets.

Key highlights

The push to private markets continues...
Private markets are by far the most favoured asset classes, with 55% of clients intending to increase allocations to real assets and 46% to private equity.
But valuations are a concern
36% of clients stated that a lack of attractive valuations was a challenge in attempting to achieve target allocations to private markets in 2019.
Europe is leading the way on ESG
Nearly all (91%) of EMEA clients consider ESG in their investment process, while in the US and Canada, just under half (46%) do so.
Divergent intentions in fixed income…
Changes in fixed income allocations vary significantly by region, with Continental Europe decreasing allocations while the Americas, Asia and the UK plan increases.
With private credit most favoured
53% of global clients intend to increase allocations to private credit. Clients also intend to add to emerging market debt (31%) and securitized assets (31%).
Putting cash to work
Globally, 23% of clients plan to reduce cash balances, but there are significant regional differences.

Asset allocation intentions

Net percentage of respondents intending to increase/decrease allocations across asset classes.

 
 

Net percentages represent a net percentage intending to increase or decrease allocations to each asset class. (Calculation: % of firms intending to increase - % of firms intending to decrease).

Base sizes: Total (271); Equities (256); Fixed Income (269); Hedge Funds (166); Private equity (202); Real Estate (224); Real Assets (195); Cash (262). Total US and Canada (110); Equities (108); Fixed Income (109); Hedge Funds (73); Private equity (89); Real Estate (96); Real Assets (80); Cash (106). Total EMEA (99); Equities (92); Fixed Income (99); Hedge Funds (55); Private Equity (69); Real Estate (86); Real Assets (77); Cash (96). Total Continental Europe (74); Equities (73); Fixed Income (74); Hedge Funds (39); Private Equity (52); Real Estate (67); Real Assets (58); Cash (72). Total Global Insurance (64); Equities (57); Fixed Income (64); Hedge Funds (29); Private Equity (48); Real Estate (52); Real Assets (45); Cash (64). Total Global Corporate Pension (88); Equities (85); Fixed Income (88); Hedge Funds (57); Private Equity (63); Real Estate (73); Real Assets (57); Cash (84). Total Global Public Pension (73); Equities (72); Fixed Income (71); Hedge Funds (50); Private Equity (61); Real Estate (70); Real Assets (64); Cash (69)

As of December 2019. For illustrative purposes only. The figures/net changes represented in percentages are illustrative in nature and do not express a forecast. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. No analysis of their suitability was conducted and no statement of opinion in relation to their suitability is provided.

Learn how institutions are approaching fixed income, ESG and alternative investing in 2020

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