Investors expect global recession within five years, study finds

Recession_signThe majority of institutional investors expect another global financial crisis within the next five years, a report has found. Increasing levels of public debt and low economic growth are also major concerns for institutional investors the world over, according to the study by Natixis Investment Managers. As public debt continues to rise, nearly 90% of institutional investors fear its impact on the global economy, with over 80% saying they foresee the next financial crisis hitting within five years. Nearly 60% said it will take place sooner, within the next one to three years. Volatility was also identified as a key trend over the coming year, as well as a continuation of historically low yield. Nearly 70% of the 500 respondents said foreign interference in elections is also becoming an increasing problem worldwide. As a result of these issues, three quarters of institutional investors favour active management to navigate through the uncertainty, while 71% said that individual investors have a false sense of security regarding passive investments and are unaware of the risks they can entail. Andrew Benton, head of northern Europe at Natixis Investment Managers, said: “Despite forecasts of recession in the near term, uncertainty grips investors and is so far preventing them from making meaningful changes to portfolios as they adopt a ‘wait and see approach’.” Over 60% said the US presidential election campaign is also likely to be a major source of market volatility. “Investors know politics could make markets more volatile and that interest rates could make their hunt for yield even harder. While global growth is likely to remain slow, they are aware it will take time and are patiently waiting to see which trends will actually play out in the year ahead,” said Benton. ©2019 funds global asia

Sponsored Profiles

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Sponsored profile: Bridging the gap

Mar 11, 2019

Private equity is a core part of the business for Caceis’ Hong Kong office, which looks after clients in China and Europe. David Li, chief executive officer, explains why private equity enjoys strong client demand and how it is being used to fund China’s international infrastructure ambitions.

SPONSORED FEATURE: Market knowledge key to fund distribution in Asia

Jan 11, 2019

The highly fragmented investment markets in the Asia-Pacific region require detailed knowledge of each market’s unique characteristics and framework. By Lou Kiesch, Partner, and Marc Noirhomme, Director, at Deloitte Luxembourg.

Executive Interviews

Executive interview: Timing the market

Oct 17, 2019

Amy Cho, Schroders’ Hong Kong chief executive and regional head of intermediary clients, tells Romil Patel about Hongkongers’ love of investing, staying nimble in a volatile market and following...

Interview: Asia’s sweet spots

Jul 05, 2019

As the US-China trade war ramps up with a hike in levies, Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management, tells Romil Patel where he identifies investment value.


Singapore roundtable: A horizon to hold long-term assets

Jan 12, 2020

Panellists discuss the geopolitical fractures concerning asset owners, Singapore as a hub for fintech start-ups and why it makes sense to raise capital from a Variable Capital Company (VCC). Chaired by Romil Patel in Singapore.

Roundtable: Priming for Asia’s growth

Oct 17, 2019

Panellists discuss expanding product capability across Asia-Pacific, the opportunities and regulatory challenges around data and the prospects for ETFs in the region. Chaired by Romil Patel in Hong Kong.