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Investors expect risk appetite to increase

Risk appetite to increase Over half of professional investors expect their risk appetite to grow over the next year, whilst views on the outlook for the global economy remain mixed.

While nearly 60% of investors said they will need to take more risk to secure returns, 14% said they expect the increase in risk appetite to be significant, according to a survey by NN Investment Partners (NN IP).

Regarding the global economy, just over a quarter expect an acceleration in economic momentum over the next year, whilst 39% said they anticipate a slowdown.

More than half of the 100 investors surveyed said they will increase their allocation to equities, while 38% said they will invest more in fixed income.

Just under 40% intend to up allocations to real estate, followed by 30% for hedge funds, 27% for commodities, and 27% for private equity, the study found.

NN IP’s head of multi-asset Ewout van Schaick said: “Yields on governments bonds are at extremely low levels – in negative territory in many European countries – and the spreads on safer corporate bonds are not much higher.

“This means that investors are compelled to take more risk to be able to meet their return targets. As most currently have only modest allocations to equity, we can expect to see stronger flows into the asset class.”

Read Funds Europe’s report on how firms are positioning their multi-asset portfolios here.

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