Institutional investors in North America are more optimistic than their European counterparts when it comes to their return expectations for the 12 months through the end of June 2018.
A survey commissioned by money manager Schroders of 500 institutional investors across the globe found 54% of North America-based investors are expecting investment returns of at least 7% in the year through June, compared with 40% of European investors.
Latin America-based investors are even more optimistic, with 55% expecting at least 7% investment performance, while 36% of Asia-based investors expect this level of return. Overall, 43% of institutional investors expect at least 7% investment gains.
A greater proportion of European investors expect returns of 1% to 4% than other regions, with 30% agreeing with this forecast. Fifteen percent of North American investors expect this level of returns, while 28% in Asia and 18% in Latin America agree. Globally, 25% of investors expect returns of 1% to 4%. The remaining investors expect a return of 5% to 6% or below 1%.
Regarding geopolitical events and the rise of populism, 48% of institutional investors said these issues will have a greater impact on the way they invest than the year ended June 30, 2017.
However, investors still view the challenges geopolitical events pose as opportunities, with 70% agreeing that world events will drive investment opportunity.
Monetary policy was also highlighted as having the biggest impact on portfolio performance, with 60% putting higher interest rates at the top in terms of having an effect on investments.
The 500 institutional investors were split 23% North America, 40% Europe, 30% Asia and 7% Latin America, across 15 countries. The research was carried out in June.
Abbie Parrott contributed to this story.