In a recent survey of 200 institutional investors from endowments, foundations and public pensions, 42% of respondents said trade wars and protectionism were the greatest risk to the global economy and markets over the next year or two, Commonfund reported Wednesday.

They aren’t the only ones concerned. The stock market certainly doesn’t want a trade war.

Respondents were less worried about rising interest rates, cited by 23%, and an asset bubble in a major economy, cited by 18%.

Commonfund, an investment firm that manages $25 billion in assets for some 1,300 institutional clients, polled investors during its 20th annual form held on March 11 – 13.

Specific to their own organizations’ performance, 50% of institutional investors surveyed expressed cautious optimism that they would be able to achieve CPI + 5%, a rate of return they considered sufficient to cover inflation, distributions and investment costs, over the next decade.

At the same time, they were more apprehensive about U.S. market performance in the near term. Fifty-eight percent expected the S&P 500 Total Return Index for year-end 2018 to underperform compared with its 20-year annual average of 7%.

“Looking ahead, the fact is, achieving CPI + 5% will be harder as this long bull market and business cycle continue to age,” Commonfund’s president and chief executive, Catherine Keating, said in a statement.

“We’ve learned over the years that Congress can change tax rates and the Federal Reserve can change interest rates, but that even together they can’t repeal the business cycle.”

Asked to compare the current market cycle to the calendar year, half of survey respondents said we are currently in September to November, nearing the end of the cycle.

Keating noted that her firm’s clients approach the next phase of the current cycle with portfolios at all-time highs and with experience weathering previous cycles.

She said Commonfund advises them to adhere to their investment policies, focus on liquidity needs and recognize that their greatest risk over time is not having enough exposure to public and private equity markets.

In other survey findings, 49% of respondents said emerging markets presented the biggest private capital opportunity today, while 27% pointed to U.S. private equity, 16% to venture capital and 8% to natural resources.

Seven in 10 respondents said they were somewhat concerned about the likelihood of a 20% correction in the U.S. stock market over the next 24 months, while only 9% were not at all concerned.

“The results of our forum survey show that these investors recognize that recent market volatility is only a modest risk for their strategic investment policies, and they remain cautiously optimistic about the long-term performance of their organizations,” Commonfund’s chief investment officer, Mark Anson, said in the statement.

Anson recently discussed opportunities to use passive investments in portfolios.

— Check out Active Managers Get Cold Shoulder From Institutional Investors on ThinkAdvisor.