Among the Australian respondents, 84% expressed their intent to increase allocations to actively managed investments, with 77% confident in the value such strategies could add amidst fluctuating market conditions. This marks a notable shift, as there had been a prior preference for passive strategies. Key motives for reverting to active management include the potential for superior performance, the desire for specialized strategies and exposure, and the capacity to navigate uncertainties effectively.
The resurgence of active strategies is a response to market volatility, exacerbated by uncertain US trade policies. The survey noted that 65% of investors identified tariffs as their primary macroeconomic concern, while 56% viewed US foreign policy uncertainty as a significant geopolitical risk impacting investment choices.
According to Simon Doyle, CEO and Chief Investment Officer at Schroders Australia, the prevailing economic uncertainties have catalysed a strategic pivot. He points out that investors are increasingly prioritising adaptability and questioning the role of passive strategies amidst volatility, aiming instead for active approaches that promise outperformance and specialised insights.
The survey further revealed that 58% of pension funds, insurance companies, and other institutional investors prioritise portfolio resilience, with 84% opting for active management to capture investment opportunities and relying on robust research processes. In this vein, Australian investors are placing emphasis on diversification and selectivity, with strong interests in both public and private markets. Global equities and private equity remain attractive, while bonds continue to offer diversification, protection, and liquidity.
Doyle underscores the importance of adaptability in such a dynamic environment, suggesting that an actively managed investment approach is crucial for securing sustainable long-term returns.
