NEPC Survey: Endowment and Foundation Confidence near All Time Highs

Geopolitics and Political Uncertainty are Investors’ #1 Concern;
Investors Expect Domestic Equities to be Top Performing Asset Class in 2017

BOSTON--()--NEPC, LLC (www.nepc.com), one of the industry’s largest independent, full-service investment consulting firms to endowments and foundations, today made public the results of its Q4 2016 NEPC Endowment and Foundation Poll, a measure of endowment and foundation views on the economy, investing, and key market trends. The results show a significant increase in investor confidence, with 64% of respondents saying the US economy is in a better place now than at this time last year. This was a dramatic change from last quarter, when 25% indicated the same sentiment, and it was the second highest confidence reading since NEPC launched this survey in 2013. Only 7% of respondents this quarter feel the US economy is in a worse place now than one year ago.

Click here for an infographic highlighting the survey’s top results.

“Despite everything that has happened over the last several months, endowments and foundations seem to be feeling pretty good right now,” said Cathy Konicki, Partner and Head of NEPC’s Endowment & Foundation Practice Group. “They are by no means carefree and there are certainly some headwinds on the horizon, but the results indicate a strong sense of economic optimism that we haven’t seen in quite some time.”

In keeping with the theme of economic confidence, investors are bullish on domestic equities, and more than a quarter of respondents (26%) believe it will be the top performing asset class in 2017. However, almost half of the respondents (47%) think the S&P 500 will return between 0% - 5% this year.

Yet despite the optimistic outlook, investors do see some dark clouds on the horizon. When asked what was the biggest threat to their near-term investment performance, nearly half of respondents (46%) selected Geopolitics and Political Uncertainty. The second highest threat was Slowdown in Global Growth (38%), further illustrating the concerns that endowments and foundations have with the current investment landscape.

Other key findings include:

  • Private equity is in: 42% plan to increase their exposure to private equity this year
  • Hedge funds are out: 30% of respondents plan to decrease their exposure to hedge funds, and only 2% expect hedge funds to be the strongest performing asset class this year
  • Investors want to be more nimble: 32% plan to allocate more to opportunistic investments this year
  • Interest rates are on the rise: 68% of respondents think rates will rise by more than 51 basis points this year.

About the Survey

The Q4 2016 NEPC survey was conducted online by the Endowment & Foundation Practice Group in January 2017. Copyright is held by NEPC. For the full survey results, contact Matt Kirdahy at matt@w.group.

About NEPC, LLC

NEPC, LLC® is an independent, full service investment consulting firm, providing asset allocation, manager search, performance evaluation, and investment policy services. It works with institutional investment programs and high net worth clients on both an advisory and discretionary basis.

The firm has offices in Atlanta, Boston, Charlotte, Chicago, Detroit, Las Vegas, Portland and San Francisco, and services 113 endowment and foundation retainer relationships, representing assets of $57 billion as of 9/30/16. Learn more at http://www.nepc.com/clients/endowments_foundations and www.twitter.com/NEPC_EandF.

Contacts

Water & Wall Group
Matt Kirdahy, 212-343-2366
matt@w.group

Release Summary

A new survey from NEPC shows that endowments and foundations are confident about the US economy and bullish on domestic equities, yet are very concerned with geopolitics and political uncertainty.

Contacts

Water & Wall Group
Matt Kirdahy, 212-343-2366
matt@w.group