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Schroders Institutional Investor Survey reveals an appetite for a broader investment universe

Return Trip: Seeking returns across a multi-speed world was the theme of the annual Schroders UK Institutional Conference held at the British Museum in London last month.

08/10/2013

Return Trip: Seeking returns across a multi-speed world was the theme of the annual Schroders UK Institutional Conference held at the British Museum in London last month. Over 150 attendees including pension fund clients and consultants were given insight into the current thinking of key Schroders’ investors and chief economist.

Setting the scene for the conference and its varied agenda was Miles O’Connor, Head of Pan European Institutional Distribution. He introduced Schroders’ guest speakers: Peter Harrison, Global Head of Equities, who presented on delivering returns in the developed world; Philippe Lespinard, CoHead of Fixed Income, who provided insight into the expanded fixed income horizon; Virginie Maisonneuve, Head of Global and International Equities, delivered a round the world tour highlighting investment opportunities in global markets; and finally Keith Wade, Chief Economist , provided insight into growth’s change of direction from West to East.

Neil Walton, Head of the UK Institutional Business Development Group, commented:

“This year’s results have been particularly interesting, over 90% of attendees surveyed at our annual conference said that they would consider an increase in equities/growth assets if they are wrapped into a risk control framework to limit the potential downside.

“Alongside this, 70% of our guests said that they were likely to broaden the investment universe of bonds within the fixed income portfolio. This shows willingness from our clients to evolve their investment strategies for the challenges ahead.”

Attendees were asked to provide insight into the current issues and challenges that influence their investment decisions. The findings were as follows:

As volatility becomes an on-going challenge for fixed income investors, attendees were asked:

  • How likely it is that your fund will accept the bond market volatility? Over 70% of respondents said that is likely or highly likely that their fund would accept the volatility, just below 30% said it was not likely at all.
  • How likely is it this your fund will move to a LIBOR plus approach? 54% said it was likely or highly likely that they would move to this approach. 46% said that it was not likely at all.
  • How likely is it that your fund will move to broaden the investment universe of bonds that the fund holds? 55% said it was likely and 15% said it was highly likely that their fund would broaden its investment universe with 30% replying that it was not likely at all.
  • In the current environment will you consider looking to global and more unconstrained fixed income investing in the future. Views were mixed on this as 53% and yes they would consider unconstrained fixed income investing in the future with 48% said they would not consider this.

Looking specifically at emerging markets, attendees were asked:

  • Do you expect your fund to increase or decrease its exposure to emerging markets (equities or debt) in the medium term? 56% said it was a possibility, 21% said yes they would expect changes to the exposure in emerging markets, however 24% said they would not expect any changes in the medium term.

Looking at pension allocation, attendees were asked:  

  • With the global economy performing better than expected this year, will your pension scheme look to increase its allocation to equities in the next six months? 13% said they would look to increase allocation to equities, 50% said they would consider it and 37% said that would not be looking to increase their allocation to equities in the short term.
  • Would an increase in equities/growth assets be more palatable if these exposures were wrapped in a risk control framework to limit potential downside? 92% said yes, or that they would consider an increase in equities/growth with downside protection. With only 8% replying that they would not consider this.

To learn more about Schroders’ current thinking visit the dedicated UK pensions website at www.schroders.com/UKPensions/home

For further information, please contact:

Estelle Bibby, Senior PR Manager, European Institutional

Tel: +44 (0)20 7658 3431/ estelle.bibby@schroders.com / +44 (0)7770 496163

Notes to Editors

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Schroders plc

Schroders is a global asset management company with £255.8 billion (EUR298.5 billion/$388.0 billion)* under management as at 30 June 2013. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.

With one of the largest networks of offices of any dedicated asset management company, we operate from 34 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.

*Source: Schroders, all data pro forma as at 30 June 2013, including Cazenove Capital assets under management

Further information about Schroders can be found at www.schroders.com.

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