More plan executives, money managers and investment consultants have embraced traditional index funds, high-yield fixed income, emerging markets equities and real estate since the financial crisis, according to a report from CREATE-Research and Principal Financial Group.
The report is the result of surveys conducted in 2009 and 2013, highlighting investment trends between those years, distinguishing between medium-term (three- to five-year) and short-term (one- to three-year) allocations.
When asked which asset classes are most likely to be chosen for medium-term asset allocation, the biggest increase from the 2009 survey was for traditional index funds. Fifty-three percent of survey respondents in 2013 said they would most likely choose index funds compared to 32% in 2009. Other asset classes that saw significant increases were high-yield bonds, emerging markets equities and real estate (debt and equity).
Global tactical asset allocation products saw the biggest dip from 2009, with 28% of respondents likely to choose the asset class for medium-term asset allocations, compared to 42% in 2009. Other asset classes that saw decreases of at least five percentage points from the 2009 survey were currency funds, developed markets investment-grade bonds, commodity funds and global equities.
The report is the result of more than 700 interviews with retirement plan officials, investment managers and consultants from 29 countries representing $27.4 trillion in assets under management. There were also an additional 100 follow-up interviews with a cross section of senior executives.
The full report is available on Principal’s website.
