Research Reports»Investor Survey 2020

The first two quarters of 2020 presented the asset management industry with some of the most challenging investment conditions in 75 years.

Following a sluggish 2019 that saw the world economy grow by 2.9% year-over-year – its lowest growth rate for ten years – the Covid-19 pandemic triggered further contraction in Q1 2020 as travel restrictions and the closure of factories, education and retail outlets applied a handbrake to trade and investment.

In fixed income markets, the survey finds strongest opportunities in high yield (58%) and investment grade corporate debt (44%, fig 2). Credit spreads have narrowed from their widest point at the onset of the Covid crisis and credit markets will potentially offer attractive opportunities during the remainder of 2020 and into 2021.

Private credit markets have grown substantially over the past decade, reaching $812 billion in AuM during 2019 according to Preqin, a provider of data and analysis for alternative investments.

Almost a quarter of a century after the Kyoto Protocol – which established a practical framework for implementing the United Nations Framework Convention on Climate Change – the financial industry’s progress in meeting commitments to environmental, social and governance principles has, arguably, been disappointingly slow.

Assets managed through global index funds pushed through the $10 trillion barrier at the end of 2019, shortly before the pandemic told hold. This represents a more-than-fourfold increase in index-based AuM over the past decade, according to data from the US-based Investment Company Institute.

The survey highlights demand for investment in hard currency Asia debt (weighted arithmetic mean = 3.60), with demand for local currency Asian debt (3.43) ranking second in this list (fig 19).

The Covid-19 pandemic, and associated global economic slowdown, has triggered a rollercoaster ride for global equities markets during 2020. The onset of the pandemic prompted a huge slide in the S&P 500 and other leading developed market equities indices during late February and early March, but then a strong recovery.

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