Nonprofit investors expect portfolio growth

Nonprofit institutional investors and pension funds expect portfolios to grow in 2013 and over the next three years and five years, a new survey says.

Among 217 institutional investors with combined assets of $123 billion who attended the Commonfund Forum and responded to the third annual Commonfund Investor Outlook Survey, investment in emerging markets also is expected to continue to grow.

Investors’ average forecast for the S&P 500 Index is for growth of 7.9 percent, with a median forecast of 8 percent.

Seventh-eight percent of respondents expect the MSCI Emerging Markets Index to outperform the S&P 500 Index over the next three years, compared with 75 percent who expected that last year.

And 55 percent expected to significantly increase allocations over the next 12 to 18 months in their emerging market equities, compared with 53 percent who expected that last year.

Investors’ average expectation is for portfolios to grow 7.6 percent in 2013, and a median expectation they will grow 7 percent, compared to an average expectation of 7.4 percent in 2012 and a median expectation of 8 percent growth.

Investors’ average expectation is for portfolios to grow 7.3 percent over the next three years, and a median expectation they will grow 7 percent, compared to an average expectation of 7.2 percent and a median expectation of 7 percent in the three years ended in 2012.

Investors on average expect portfolios to grow 7.4 percent over the next fiveĀ  years, and a median expectation they will grow 7 percent, compared to an average expectation of 7.6 percent and a median expectation of 7 percent in the five years ended in 2012.

“Institutional expectations for the markets and select asset allocations such as emerging markets indicate that participants continue to be net positive about 2013,” Verne Sedlacek, president and CEO of Commonfund, says in a statement.

“The data show that overall concerns about downside risk has been reduced since last year,” he says, “although respondents are still very worried about achieving their investment return goals.”

— Todd Cohen

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