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.”

Other Themes

Besides asset allocation changes, the Q4 survey looked at other high-level themes and issues on the minds of endowments and foundations this year.

A smaller majority of investors than in the third quarter still said a slowdown in the global economy was the biggest threat to their near-term investment performance.

One new area of concern the fourth quarter was global deflation, which has been gaining momentum in recent quarters, according to NEPC.

About a third of respondents expected interest rates, based on the 10-year Treasury note, to rise by up to 50 basis points by the end of 2015. Another third said rates would rise by 50 to 100 basis points, and 25% expect them to remain the same.

Seventy percent of respondents planned to maintain their fixed income allocation in 2015, while 14% said they would increase it and 16% would decrease it.

In one of the most lopsided segments of the survey, according to NEPC, more than 80% of respondents said they did not currently hedge currency risk despite the strength of the U.S. dollar, and the vast majority had no plans to do so this year.

Of those that did plan to hedge currency risk this year, 44% said they would do so through their investment managers.

However, given growing fear about the potential for global deflation, three-fourths of respondents said they would maintain their inflation hedging allocation this year.

Of those looking to change it, the majority said they would increase both liquid and illiquid real assets.

NEPC suggested this may be the result of investors seeing an opportunity in the recent dislocation of energy prices.