Nearly all institutional investors feel at least somewhat confident they can successfully navigate market volatility, a new Wilshire Associates survey shows.
In a news release announcing the results of the survey Monday, 56% of the 75 institutional investors surveyed by Wilshire are somewhat confident they can do so, and 39% feel very confident. Five percent of respondents do not feel confident their organizations can successfully navigate volatility.
When asked which asset classes will generate the best returns over the next 12 months, 21% said domestic equities and 20% said emerging markets equities. A combined 29% said either domestic or international fixed income would provide the best opportunity for returns.
Respondents expressed the most concern regarding a potential downturn on geopolitical events, the news release said, with about 40% saying the U.S.-China trade war could be the instigator of such a downturn, while 20% expect U.S. monetary policy to be a potential culprit and 14% said the 2020 U.S. election could lead to a downturn.
"While it is nearly impossible to predict what might trigger a sustained market correction, institutions can make sure their portfolios are well-diversified to account for various risks and market scenarios," said Steven J. Foresti, chief investment officer of Wilshire Consulting, in the news release. "Since investor perceptions of preparedness for market turbulence can often differ from actual readiness, running portfolio stress tests can be a valuable technique to (gauge) an institution's preparedness."
