Amid the threat of tariffs and escalating geopolitical tensions, asset owners increasingly expect the U.S. market to bring lower returns or losses, according to Commonfund’s annual market sentiment survey.
In the survey of 203 institutional investors representing more than $800 billion in assets, 62% of respondents said they believe U.S. stock market returns will be lower than the 10-year annualized return for the S&P 500 index — which was about 12.4% as of Feb. 14. This is an increase from 2024, when 35% of respondents shared the same sentiment.
In comparison, 20% of respondents this year said they expect “about the same” returns, down from 45% of respondents in 2024. Whereas, 6% respondents said they expect negative returns, up 5% the previous year.
Meanwhile, 11% of respondents said they expected higher returns, and about 1% did not respond to the survey question, a spokesperson for Commonfund noted in an email.
The results of the survey are “no surprise” amid uncertainties during the second Trump administration, noted Mark Anson, CEO and chief investment officer at Commonfund, in a March 27 news release.
Top concerns among investors who participated in the survey were tariffs (56%), geopolitical tensions (51%), as well as rising inflation and interest rate adjustments (43%). Geopolitical tensions as noted in the survey include relations between the U.S. and China, as well as wars in the Middle East and between Russia and Ukraine.
But respondents who said they felt “bullish” and investors who said they felt “bearish” about the economy under this administration, there was an even split of 22%.
“Despite the uncertain investment climate, long-term investors remain largely confident in the ability of their organizations to achieve target returns, due in part to increasing confidence in alternative asset classes,” Anson added. “We will continue to see how confidence in private markets influences investment decisions in the years ahead.”
Among investors surveyed, the asset classes they expected to deliver the best absolute or total returns this year are private equity (61%), private credit (37%) and venture capital (32%). In comparison, investors last year expected strong returns to be driven by private equity (50%), public equity (48%) and venture capital (35%).
And the expectation for cryptocurrency is 12%, up from 7% in 2024 and 2% in 2023.
The survey was conducted during Commonfund’s annual forum from March 8 to March 11. Held this year in Orlando, Fla., the event drew in more than 300 investors, among which included endowments, foundations and pension funds.
