Geopolitical uncertainty is top of mind for most institutional investors, according to a survey from asset manager Commonfund. Still, the investors surveyed reported a positive long-term outlook.
The survey was conducted in person during Commonfund’s annual forum from February 25 through February 28 and polled more than 200 institutional investors who collectively manage $238 billion in assets. It found that approximately 49% of respondents said they expect lower returns for the S&P 500 Index this year than its 10-year average annualized return of 13%.
Commonfund specializes in managing long-term portfolios for nonprofits and other institutions.
Another 35% of investors reported expecting returns to be the same as the 10-year average, with 14% saying they expect higher returns, while 2% expected negative returns. Year-to-date, the S&P 500 Index is down 2.40%. The STOXX Europe 600 is up 0.46%, and the MSCI World Index is up 0.09%.
A majority of investors surveyed cited geopolitical events as the top issue facing the economy, at 52% of respondents, followed by 16% that cited rising inflation and 10% pointing to the potential for a recession.
Investors expressed benign sentiment toward the U.S. economy, with 42% describing themselves as neutral. Approximately 35% reported a bullish view on the economy, up from 22% in last year’s survey, while 17% of respondents said they were bearish, compared with 22% who said so last year.
The outlook for private markets was largely mixed, with 34% of respondents saying they expected returns to be about the same as the last 12 to 18 months, 31% saying they expected stronger returns, and another 30% saying they expected returns to be weaker.
“While today’s environment is undeniably complex, the results reinforce that institutional investors are approaching 2026 with discipline, realism and a long-term perspective,” said Mark Anson, Commonfund’s CEO and CIO, in a statement.
Approximately 59% of survey respondents said they are modestly bullish about their ability to achieve their return targets over the next 10 years, with 17% saying they are very bullish. Another 17% reported starting to feel nervous about being able to meet their return targets, with just 1% reporting feeling very nervous.
“We are cognizant of the current geopolitical circumstances that might allow for a more cautious near-term outlook. However, long-term investors remain largely confident in their ability to achieve target returns, supported by diversified portfolios, allocations to alternative asset classes, and the identification of non-correlated alpha streams,” Anson said. “We expect private equity and public equities to continue playing a meaningful role in helping institutions pursue their long-term objectives in the years ahead.”
Tags: Commonfund