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Fund Selector Survey RISK READINESS AT THE FORE
Uncertainty drives demand for risk management and volatility-dampening strategies
ALLOCATING TO RESILIENCE
Driven by precarious geopolitical and economic conditions, fund selectors are increasingly seeking risk-minded managers and volatility-dampening strategies. Trends in fund selection also show demand for income and diversification, with allocations to public fixed income and private markets expected to rise.
Read our latest Gatekeeper Pulse® survey for insights on the attitudes, allocation plans, and issues that matter most to key decision-makers in fund selection. Research participants include 210 gatekeepers who work for global financial firms in Europe and Asia and manage a combined $31 trillion in assets (USD).
TOP TRENDS AMONG FUND GATEKEEPERS
MOST BULLISH ABOUT BONDS
- Over one-third of gatekeepers indicate plans for increased public fixed income allocations with a similar amount recommending higher private credit allocations.
- Gatekeepers prioritise income and diversification via high-quality bonds (e.g., government bonds, IG credit) and plan to pursue outperformance amid mounting macro risks (e.g., high yield, EM debt).
AFFINITY FOR LIQUIDITY
- In public markets, gatekeepers show a preference for liquidity in the face of ample risks and concerns from a macro standpoint.
- Open-end funds and ETFs are preferred to facilitate repositioning as market conditions shift, and gatekeepers favour certain thematic investments, like AI, as priorities for finding differentiated outperformance.
RECALCULATING RISK
- Gatekeepers consider risk management processes as a pivotal factor in fund selection, even more so when it comes to alternatives funds and choppy market environments.
- More than eight in 10 gatekeepers say risk management is as important as track record when selecting an alternatives manager.
PRIVATE MARKET PRIORITIES
- Gatekeepers expect further growth in alternatives, as infrastructure, private equity and private credit top the list of asset classes where firms expect to raise allocations.
- Within these broader private market categories, fund selectors focus on consistent, stable returns and strong risk management rather than pure performance.
PRIORITIES SHAPED BY LOCAL PERSPECTIVES
Survey responses suggest unique regional preferences between fund gatekeepers in Europe and Asia.
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Gatekeeper Pulse is a trademark of PGIM, Inc. and its affiliates, registered in many jurisdictions worldwide.
Survey participants were based in the United Kingdom, Austria, Germany, Switzerland, Belgium, Netherlands, Luxembourg, Italy, Denmark, Finland, Norway, Sweden, Singapore and Hong Kong.
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
The views expressed herein are those of PGIM investment professionals at the time the comments were made, may not be reflective of their current opinions, and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither PFI, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
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