Schroders Survey: North American Institutional Investors Turn to Active Management Amid Volatility and Concentration Risk

NEW YORK--(BUSINESS WIRE)--North American institutional investors are prioritizing portfolio diversification, capital growth and income generation as they navigate a market characterized by volatility, market concentration and structural market shifts, according to global asset manager Schroders.

The firm today released the North American findings of its annual Global Investor Insights Survey, which polled pension funds, insurance companies, single-family offices, endowments, foundations and official institutions for their views on key investment and market themes, such as market volatility, active management, public and private markets, income generation and credit investing.

The findings show that 79% of North American institutional investors believe the next 12 months will hold more market volatility than the previous year, driven by geopolitical escalation or armed conflict (52%), commodity and energy price shocks (46%) and AI-driven disruption, including labor market weakness and sector reallocation (43%).

Geopolitical concerns in particular are already shaping investment decisions, with 71% of North American institutional investors citing conflict in the Middle East as a factor influencing their investment decision-making today.

Against this macro backdrop, North American institutional investors continue to prioritize portfolio diversification (83%) and downside protection/capital preservation (82%), while also maintaining a focus on capital growth (62%) and income generation (52%).

Active management plays an important role in portfolio construction

With this increasingly uncertain investment backdrop, investors expressed strong confidence in active management, with 82% of North American institutional investors saying it can help achieve investment objectives over the next 12 to 18 months.

Notably, nearly four in ten (39%) North American institutional investors say they are increasing allocation to active management specifically to reduce concentration risk—the most frequently cited concern in the region.

Investors also see global equities as the asset class that stands to benefit the most from increasing active management allocations, with more than one-third (36%) selecting it.

Tom Darnowski, CEO, Americas, at Schroders said:

“This year's findings highlight the breadth of challenges institutional investors are navigating today, from geopolitical uncertainty and evolving trade dynamics to AI-driven disruption and heightened market concentration. What’s striking is that investors aren’t responding by abandoning growth. Instead, they’re looking for ways to balance growth ambitions with greater diversification, income generation and portfolio resilience.

In this environment, an active approach to portfolio management can help investors navigate changing market conditions, uncover differentiated and global opportunities and stay focused on long-term objectives.”

Investors adopt a holistic approach to income generation

Income-generating assets are serving multiple portfolio objectives for North American institutional investors. Among the leading reasons for allocating to these securities are diversification away from pure growth strategies (47%), generating regular cash flow (46%) and reducing portfolio volatility while preserving capital (43%).

As investors seek diversification, reliable cash flow and greater portfolio resilience, many are expanding their search for income opportunities beyond traditional asset-class silos. A majority (57%) of North American institutional investors now say they evaluate income-producing opportunities holistically across equities, fixed income and private markets.

This shift toward a more integrated approach is also shaping where investors see the strongest risk-adjusted income opportunities over the next 12 to 18 months. Equity income (43%) ranks as the most attractive opportunity, followed by actively managed public corporate bonds (38%) and diversified government bond exposures (36%), underscoring continued demand for income sources across both equity and fixed income markets.

Investors take a broader view across public and private markets

As companies remain private for longer, North American institutional investors are increasingly taking a more holistic view of equity allocations, looking across both public and private markets to access growth and return opportunities. Private equity allocations are expected to increase, with 90% of North American institutional investors currently allocating a portion of their portfolio to private equity, rising to 93% over the next 12 to 24 months.

Credit allocations are also evolving. The share of North American institutional investors allocating more than 10% of their overall credit portfolio to private credit is expected to increase from 25% today to 33% over the next 12 to 24 months, while the share of investors with no private credit allocation is expected to decline from 17% to 15%.

Within credit markets, investors see some of the strongest alpha opportunities in specialized strategies. Among those investing in these areas, 75% identify distressed and special situations credit as a source of alpha, followed by emerging market debt (66%) and subordinated or below-investment-grade private credit (64%).

Tom Darnowski added:

“Investors are increasingly recognizing that some of the most compelling growth and alpha opportunities may not fit neatly within traditional public-market allocations. As the opportunity set continues to expand, we’re seeing investors move beyond traditional asset-class boundaries and take a more outcome-oriented approach to portfolio construction, seeking complementary sources of growth, income and diversification across public and private markets.”

To explore the data from the survey in full, please click here.

Note to Editors

The fieldwork was carried out by CoreData Research via an extensive global survey during April–May 2026.

The 1025 respondents, comprising institutional investors and ‘gatekeeper’ wealth managers, represent a spectrum of institutions, including pension funds, insurance companies, single family offices, endowments and foundations, official institutions, and wealth gatekeepers.

The 1025 respondents were split as follows: 287 from North America, 287 from Europe (ex. UK), 133 from the United Kingdom, 246 in Asia Pacific, 41 from Central and Southern America, and 31 from the Middle East and South Africa. Specific to institutional investors, 760 were surveyed, inclusive of 207 from North America.

To view the latest press releases from Schroders visit: https://www.schroders.com/en-us/us/institutional/media-center/

Schroders plc

Schroders is a global investment manager which provides active asset management, wealth management and investment solutions, with £823.7 billion (€943.4 billion; $1107.9 billion) of assets under management at 31 December 2025. As a UK listed FTSE100 company, Schroders has a market capitalisation of circa £6.5 billion and operates across 38 locations. Established in 1804, Schroders remains true to its roots as a family-founded business. The Principal Shareholder Group continues to be a significant shareholder, holding approximately 44% of the issued share capital.

Schroders' success can be attributed to its diversified business model, spanning different asset classes, client types and geographies. The company offers innovative products and solutions through four core business divisions: Public Markets, Solutions, Wealth Management, and Schroders Capital, which focuses on private markets, including private equity, renewable infrastructure investing, private debt & credit alternatives, and real estate.

Schroders aims to provide excellent investment performance to clients through active management. This means directing capital towards resilient businesses with sustainable business models, consistently with the investment goals of its clients. Schroders serves a diverse client base that includes pension schemes, insurance companies, sovereign wealth funds, endowments, foundations, high net worth individuals, family offices, as well as end clients through partnerships with distributors, financial advisers, and online platforms. Issued by Schroder Investment Management Limited. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.

Important Information

All investments involve risk, including the loss of principal. Past performance is not a guide to future results and may not be repeated. Active management cannot ensure profits or protect against loss of principal. Forward looking views and forecast may not be realized. The views shared are those of the author or individual(s) quoted and may not reflect the views of Schroders Plc or any of its affiliates. Any mention of asset classes, sectors or security types is for informational purposes only and should not be interpreted as a recommendation to invest in or divest from any asset. No reliance should not be placed on the views and information in this material when making individual investment and/or strategic decisions. Schroder Investment Management North America Inc (SIMNA Inc.), SEC registered investment adviser, CRD Number 105820.