Nearly two out of three professional investors (64%) said macro investing has become more relevant, given the financial market turmoil seen in recent years.
Fulcrum Asset Management quizzed a set of 205 professional investors on a range of topics via research firm Censuswide. Some 100 of the respondents were UK based and 105 were in the US.
Of the 64% who said they see increased relevance of macro investing, 77% said that this was due to the fact that 2022 had shown the risks inherent in a portfolio concentrated in equities and bonds.
The post pandemic period has seen large swings in markets across the board as interest rate expectations have fluctuated with inflation data, emphasising the limited the effectiveness of stock picking during large macro-triggered movements.
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Global macroeconomic factors were cited as ‘important’ when constructing or adjusting a portfolio by 81% of investors surveyed, and 72% said that they were either allocating more (58%) or were starting to think about allocating more (14%) to diversified strategies such as global macro, over the next 12 months.
When asked why global macro investment strategies might be beneficial to asset allocation, 56% attributed it to their ability to opportunistically take quick advantage of macro events.
Diversification at 51% was another widely cited benefit, due low correlation to equities and bonds. Almost half (45%) also saw the benefit of such a strategy as ‘a counter to financial and political shocks’. Around 1% saw no benefits to the strategy and suggested they could lead to ‘knee-jerk’ decisions.
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Over four in 10 (44%) described macro investment strategies as having become mainstream, nearly a third said it is not always clear what is in them, and 28% described them as ‘still a bit of an enigma.’
Joe Davidson, managing partner at Fulcrum, said: “The results of our survey demonstrate that the economic twists and turns of the past few years have well and truly left their mark as they have repeatedly upended expectations.
“It has become clear that, as a result, investors are looking to bolster their portfolios, with nearly three-quarters of those surveyed stating that they were either allocating more, or starting to think about allocating to diversified strategies such as global macro, over the next 12 months.”
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