Natixis Survey: Majority Say Active to Outperform Passive in 2023

February 24, 2023

A new survey from Natixis Investment Managers finds that many fund selectors believe active management will outperform passive in 2023 and that active funds will be critical tools in helping investors weather a recession.

441 fund selectors at wealth management firms, RIAs, private banks, fund-of-fund managers, insurance platforms, and other organizations in 28 countries were surveyed.

80% of the respondents said that active management is necessary to achieve alpha in a recession.

“As they contemplate the reality of a recession, fund selectors are looking to active investments as a critical tool for managing client portfolios,” Natixis wrote.

As for 2022 results, 56% of active managers said their active funds outperformed their passive investments.

And they expect even greater benefits from going active this year: 72% of fund selectors believe active management will outperform passive investments in 2023 and 60% say they plan to increase the number of active funds on their platform this year.

Some of the reasons why:

• Volatility: Survey respondents see 2022’s volatility continuing into 2023. 51% believe that volatility overall will rise over the next year, and 72% say the volatility in the bond market will rise or stay as elevated as 2022.
• Valuations: 86% believe the market will “recognize that valuations matter again.”
• Dispersion: 42% believe the differences in returns among securities will be the same as 2022’s elevated dispersion, and 41% say that dispersion will be even higher in 2023.

The survey writes that the allocation calls of fund managers show “they will actively manage clients’ portfolios to better position for this new reality” of inflation, rising rates, and heightened volatility.