Foundations and endowments feel the U.S. economy is in better shape entering 2015, an NEPC survey said.
Among 56 respondents surveyed in January, 80% believe the economy is in a better place than they said it was in the previous quarter, when 56% of respondents replied with that answer.
Meanwhile, when asked what posed the greatest threat to their investment programs, 54% answered a slowdown in global growth.
Also, when respondents were asked which asset class they believe will be the strongest performer in 2015, 36% said domestic equity.
Paradoxically, however, it was also the asset class to which the second most respondents said they planned to decrease their exposure. When asked whether they plan to increase, keep the same or decrease allocations to multiple asset classes, 21% replied they planned to lower their domestic equity allocation. The most was international fixed income at 24%.
“I think despite a fairly bullish outlook for 2015,” Scott Perry, partner in NEPC’s endowment and foundation group, said in a telephone interview, “I think investors (have a) longer-term view that traditional assets and certainly U.S. equities will be challenged to meet the 7% or 8% program return goal that each institution has, so they’re looking for ways to complement that with higher return strategies.”
Among respondents, 33% plan to increase their allocations to private equity in 2015, the highest increase among asset classes.