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.”