The II Fear Index: No Business-as-Usual Anytime Soon

Around the world, businesses are beginning to reopen from the coronavirus pandemic. But asset owners and investment managers won’t be returning to normal anytime soon, according to the latest II Fear Index.

Institutional investors participating in the weekly poll broadly indicated they would continue to stay home for at least the next month, with just 15 percent planning to return to the office in June. However, a majority believed they would be back at their workplace by fall: Thirty percent said day-to-day office work would resume in July or August, while another 30 percent predicted it would happen in September or October.

There was less consensus on the subject of in-person meetings. While the highest proportion — 31 percent — indicated they would begin meeting with clients or asset managers in September or October, another 28 percent anticipated that they would not have any face-to-face meetings until 2021. 

Respondents were least optimistic on the prospects of business travel, with the plurality — 38 percent — predicting they would not resume traveling for work until next year. 

The results are part of this week’s II Fear Index, Institutional Investor’s recurring poll of institutional allocators and asset managers. For the third week in a row, respondents were split on whether governments should be focusing more on public health or economic stability at this time, with 55 of this week’s 109 respondents prioritizing health and 54 emphasizing GDP.

[II Deep Dive: The II Fear Index: Investors Want the Fed’s Support, Even If It Increases Credit Risk]

Investors also continued to show unease over the economic leadership of their national governments. Just under half of respondents reported that their level of optimism regarding government ability to manage economic affairs had decreased this week — the highest weekly jump in pessimism recorded by the index so far.

Thirty percent said they felt less optimistic about their country’s economic prospects compared to last week, while 24 percent reported an increase in optimism.

Elsewhere in this week’s survey, investors were asked about asset management fees and the factors driving their investment decision-making.

The most urgent consideration for investing in a given company, according to 61 percent of respondents, was the firm’s liquidity position. Fifty-seven percent cited risk management strategies among their top-three considerations, while 45 percent said they focused on growth forecasts. Just 16 percent indicated that environmental, social, and governance practices were an urgent concern.

On the subject of fees, asset managers and allocators indicated that the business disruption and market volatility caused by the pandemic would likely shift the balance of power toward allocators. Forty-two percent of survey respondents anticipated downward pressure on fees over the next 12 months, while just 10 percent predicted fees would increase. The rest (48 percent) said fees would not be impacted by recent events.

More results from the II Fear Index poll continue below. To contribute to the index, please register here.