Aon : Hewitt survey reveals fund managers’ top asset classes for 2015

LONDON, 01 December 2014 - Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), has revealed survey findings in which fund managers indicated that they expect allocations to emerging market equity to be among the key growth areas in client portfolios in 2015, while expecting credit to be the worst performer.

At its recent Fund Manager Conference attended by over 120 managers, Aon Hewitt asked the attendees about their attitudes towards markets, asset allocation and investment strategy in 2015.

Lennox Hartman, global head of fixed income strategies, at Aon Hewitt said:

"With an increasingly uncertain outlook for global markets and a persistently low UK base rate constraining gilt yields, the clear message from the fund managers attending this year's conference is that to outperform long-term liabilities, institutional investors will need to look beyond domestic assets for positive returns in 2015."

Key findings from the survey showed that fund managers believe institutional clients will see the best performance from, and will increase allocations to, the following asset classes in 2015:

Strongest performer        % of responses
Emerging Market Equity              21.5%
US Equity                                  10.8%
Global Equity                              10.8%
Multi Asset                                   9.2%

Expected institutional allocations to increase       % of responses
Multi Asset                                                                         18.3%
Infrastructure                                                                       13.3%
Inflation Protected/Index Linked                                             11.7%
Emerging Market Equity                                                       10.8%

Lennox Hartman continued:

"Almost half of the fund managers (47%) expect that investment-grade and high-yield credit will deliver the weakest returns during 2015, so unsurprisingly allocations here are projected to decrease over the course of the year. With tight credit spreads and low gilt yields, these asset classes have clearly lost favour among institutional investors."

The survey also showed that fund managers believe that institutional clients will increase allocations to alternative assets including infrastructure, private equity, hedge funds and multi-asset.

John Belgrove, senior partner at Aon Hewitt said:

"With limited return potential in traditional equities and bonds, it is no surprise that fund managers expect to see investors diversifying into illiquid assets as a means of enhancing their portfolio return.  Although individual circumstances need to be considered, there are many large institutional investors with more liquidity than they need who could take advantage of the opportunity to enhance risk adjusted returns in 2015."

Media Contact: 
Colin Mayes                              Marina Jane-Sanchez
Aon Hewitt                                 Capital MSL
01372 733689                            020 3219 8811
colin.mayes@aonhewitt.commarina.jane-sanchez@capitalmsl.com

Notes to Editors

About Aon Hewitt
Aon Hewitt empowers organisations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organisational and personal performance and growth, navigate risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness.  Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide.  For more information on Aon Hewitt, please visit www.aonhewitt.com

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About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon's global partnership with Manchester United.