The majority of institutional investors and wealth managers plan to increase their use of actively managed investment strategies in the year ahead as economic uncertainty continues to grow, according to the Schroders’ 2025 Global Investor Insights Survey.
The survey, which spanned nearly 1,000 institutional investors and wealth managers globally, found that 80 per cent of global investors are somewhat or significantly more likely to increase their use of actively managed investment strategies over the next year.
Among Australian investors, this proportion was slightly higher at 84 per cent, with 77 per cent confident that active management would deliver value in the new investment landscape.
The top factors contributing to this confidence include the opportunity to capture outperformance at 62 per cent, seeking specialist approaches and exposures at 62 per cent and harnessing nimbleness to navigate uncertainty at 48 per cent.
Schroders noted that the findings from the survey follow significant market volatility earlier this year, largely driven by the US government’s decision to introduce wide-ranging trade tariffs.
Tariffs remained the biggest macroeconomic concern for nearly two-thirds of the survey respondents.
Continued uncertainty in US foreign policy was highlighted as the greatest geopolitical risk impacting investment decision making, with more than half of respondents listing this as a major risk.
Schroders said trade and policy uncertainty is likely to have fuelled investors’ strong focus on portfolio resilience over the next 18 months – which was the overwhelming top priority for portfolios. Over half of all investors surveyed highlighted this as their top priority.
Of the investors who prioritised portfolio resilience, 84 per cent said they are increasingly looking to harness active management.
Schroders said this was driven by a recognition that capturing investment opportunities and rigorous research into companies and industries were the top attributes investors sought from their active fund managers.
Schroders Australia’s chief executive officer and chief investment officer, Simon Doyle, said investors have a clear focus on outperformance, specialist strategies and navigating uncertainty at the moment.
“Investors are prioritising adaptability, whilst raising questions about the value of passive approaches in periods of greater unpredictability and future market trends,” Doyle said.
“Against the backdrop of trade and geopolitical uncertainty, investment priorities have shifted, with resilience now front of mind. Since broad market gains can no longer be taken for granted, active strategies are playing a crucial role in helping investors manage complexity, build resilience within portfolios and identify compelling opportunities.”
The survey also revealed that investors are actively seeking selective opportunities to generate returns through exposure to both public and private markets.
Public equities and private equity have emerged as the preferred asset class for return generation in the current environment, the survey showed.
Among those currently investing in private equity, investors identified enhancing long-term return potential and access to small and growing businesses as the top two roles it can play in portfolios.
Seven in 10 or 71 per cent of investors consider small to mid-cap buyouts as compelling, reflecting a pivot towards investments more likely to be insulated from global trade tensions.
“Notably, more than two-thirds of investors (69 per cent) who believe public equities will deliver strong returns, believe global equity allocations will deliver the strongest performance,” Schroders said.
“This shift underscores a growing conviction in reducing concentration risk and diversifying away from US mega caps, as 80 per cent identified the S&P 500 as the index giving investors the greatest cause for concern about market concentration.”
The survey also highlighted how income generation has evolved from a traditional fixed income allocation to multi-channel, risk-adjusted sources encompassing traditional bonds, corporate debt and asset classes within private debt and credit alternatives (PDCA).
PDCA was the most attractive allocation option for global investors looking to generate income over the next 12 months, selected by half of investors, followed by high-yielding equities at 37 per cent and increasing exposure to real estate at 30 per cent.
Schroders said bonds still continue to play a crucial role in investors’ portfolios, particularly in the current market environment.
“Investors like their ability to provide diversification (70 per cent), their function as a defensive asset to help manage risk (58 per cent), and their contribution to portfolio liquidity (46 per cent),” it said.
“This demonstrates that despite changing conditions, bonds remain central to building resilient and well-balanced investment strategies.”
Doyle said Australian investors are demonstrating a clear shift towards diversification and selectivity in their pursuit of returns, increasingly turning to active management.
“We are seeing strong interest in both public and private markets, with conviction in global equities and private equity opportunities amongst Australian investors. Bonds continue to play a vital role in building resilient portfolios through diversification, downside protection and liquidity,” he said.
“This dynamic, actively-managed approach highlights the importance of adaptability in achieving robust long-term investment outcomes.”
