Eighty percent of endowments and foundations in a recent survey said the U.S. economy was in a better place than it had been at the same time a year ago.
Respondents in NEPC Q4 2014 Endowment and Foundation Poll, released Tuesday, predicted that U.S. equities would be the top asset class performer in 2015, and 95% expected the S&P 500 to end the year in positive territory.
Despite these positive views, however, the poll found that endowments and foundations planned to decrease their allocation to U.S. equities this year. This reduced allocation theme carried through most traditional asset classes, with respondents favoring alternatives in 2015.
Thirty-three percent of respondents said they would increase their allocation to private markets, and 26% each would increase investment in hedge funds and liquid and illiquid real assets.
By comparison, only 9% of respondents said they would increase their allocations to U.S. equities, while 70% would maintain their allocation and 21% would decrease it.
“Given the strong multiyear bull run we’ve experienced in domestic equities, we’re not surprised that endowments and foundations are dialing down their allocation and shifting to other asset classes,” Scott Perry, a partner in NEPC’s endowment and foundation practice, said in a statement.
“Increasing exposure to investments that have recently experienced significant gains has the potential to disappoint over the long term, so some moderation might be in order right now.”
Besides asset allocation changes, the Q4 survey looked at other high-level themes and issues on the minds of endowments and foundations this year.