Confidence has returned among institutional investors worldwide, but major investors are split on volatility’s impact on future returns, finds a survey by Pyramis Global Advisors.
Nine in ten pension plans and other institutional investors believe they can achieve target returns in five years, significantly higher than the 65% reported in 2012, shows the survey.
Pyramis surveyed 811 respondents in 22 countries representing more than US$9 trillion in assets.
“While the outlook on volatility varies greatly by region, institutions worldwide largely agree that they can continue to grow their portfolios and improve funded status,” says Pam Holding, chief investment officer at Pyramis.
Only 7% of U.S. institutions expect volatility to decrease, while 42% expect an increase in volatility. This trend continues across North America with only 10% of Canadian plans expecting a decrease in volatility, while 60% foresee an increase.
While market volatility remains a top concern in Europe and Asia, U.S. institutions are expressing less worry about capital markets than years past.