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Markets

Asset owners say bull market may soon run out of steam – survey

Nearly half of asset owners expect the current bull market to end within the next year, results of a survey conducted by Commonfund found.

According to the survey, 46% of respondents expect the current bull market to end within the next year, while 32% believe it will last for two years. Meanwhile, only 14% think it's already over.

With regard to the bull market's end, 34% of respondents believe weakening consumer confidence will be the primary cause, followed by trade wars (18%), higher interest rates (17%) and the growing U.S. deficit (12%).

"While investors have grown more skeptical about the longevity of this strong economy, we feel the business cycle maintains the momentum necessary to further this historic bull run in the immediate future," Commonfund CEO and CIO Mark Anson said in a news release announcing the survey results. "Today, long-term investors must remain steadfast in the investment policies they've established over the last decade in order to best serve their organizations when the market cycle does ultimately reach its end."

Other noteworthy results of the survey reveal that when it comes to private capital strategies, respondents see the greatest opportunity in U.S. private equity (40%), specifically smaller buyout funds (28%), followed by emerging markets private equity (31%), secondaries (11%) and venture capital (9%).

Meanwhile, more than half (58%) of respondents see diversity as critical to both their organization's internal culture and their investment strategy, while 15% find it critical internally but not for their investment strategies and 10% find it critical for investing but not an internal priority.

More than half of respondents (58%) also believe the global stock market total return for year-end 2019 will underperform its 20-year annual average of 4.4%.

Roughly 200 institutional investors were surveyed March 24-26 at the 21st Annual Commonfund Forum held in Orlando, Fla.