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Investors Turn to Active Managers to Find Global Opportunities

Investors Turn to Active Managers to Find Global Opportunities

July 11, 2023

Investors are turning to active managers to uncover opportunities in a global marketplace that remains volatile.

A recent article in Institutional Investor cited a report from Investment Metrics, which found that institutional asset flows to active managers rose to $50 billion in the first quarter of 2023, an 18% year-over-year increase.

“Some institutional investors were clearly trying to take advantage of the low valuations in public equities and in emerging markets,” the report said.

The strongest gains were in non-U.S. equity and in emerging markets, with non-U.S. equity taking in $3.9 billion, a 28% increase, and emerging markets taking in more than $1 billion from institutional investors, up from $395 million a year earlier.

That includes considerable flows into emerging market debt, as investors believed that emerging market nations will follow the Federal Reserve with smaller rate hikes.

Also gaining assets in the first quarter were fixed-income strategies, which grew to $28.4 billion from $24.6 billion.

The article says that the “surge of new capital into active strategies follows a period in which active managers demonstrated their expertise during the increased market volatility seen in 2022,” which included a rising interest rate environment and Russia’s invasion of Ukraine.

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