This content is from: Portfolio
Is a Recession Inevitable? Most Managers Have the Same Answer.
Natixis found that 80 percent of allocators believe active managers are “necessary” to find alpha during a recession.
When asked whether the global economy was in a recession, the majority of professional investors say that it is, according to Natixis Investment Managers, a firm of more than 20 active managers with an aggregate of $1.1 trillion under management.
That isn’t surprising, given investors’ views of a prolonged economic downturn. Most believe a recession is, or will be, necessary to fully curb rising inflation, according to the Natixis survey of 441 allocators at top wealth management firms, family offices, fund-of-funds firms, defined contribution plans, and other institutions. The group surveyed is scattered across 28 countries and oversees $30 trillion in client assets.
Globally, 60 percent of allocators said a recession is inevitable and 70 percent of investors in finance’s Europe, Middle East, and Africa business region said the same.
It’s important to note that sentiment on recessions differs widely by region, Natixis said in its 2023 Global Fund Selector Outlook Survey published Tuesday.
Only 53 percent of U.S. investors said a recession is inevitable this year, according to Natixis. (Thirty two percent of U.S. investors said the economy was already in a recession at the end of 2022.) Investors in the U.K. and Asia are nearly as optimistic; 57 percent and 56 percent, respectively, said a recession is inevitable.
Recession this year or not, investors are already looking ahead and don’t feel too negative about their prospects for 2023 — 73 percent said they either will maintain their average return assumption of 8.8 percent or increase their assumptions.
To achieve that, the investors surveyed are leaning on active managers. Eighty percent said active managers are “necessary” to find alpha during a recession. In 2022, more than half of those surveyed (56 percent) said active managers outperformed their passive investments; 60 percent said they plan to increase the number of active funds on their platform in 2023.