U.S. Investors: Some Stuck in Neutral – Some Ready for a Change, Finds Natixis Global Asset Management Survey Many Interested in Personal Performance Benchmarks Business Wire BOSTON -- May 12, 2014 U.S. investors are beginning to fall into two groups, one stuck at an impasse with competing desires for growth and stability, and the other at a turning point, ready to reset their expectations and approach to investing, according to findings of a survey published today by Natixis Global Asset Management. “Many investors have set aggressive investment targets, but don’t have a realistic way of reaching them,” said John Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia. “Something has to change. The markets have reached new heights and investors feel generally comfortable about portfolio performance. But without a plan that incorporates individual risk and personal benchmarks, the odds are diminished that investors will meet their goals.” Natixis, which manages more than $899 billion in assets through its affiliates, surveyed 1,050 investors across the U.S. as part of a global survey of nearly 6,000 investors in 14 countries around the world. It found that while strengthening global markets have fueled a renewed and urgent focus on growth as an investment priority, many investors remain fearful of losses and lack direction about how to move forward. Investors at an Impasse – Unrealistic Goals, Need for Knowledge According to the survey, Americans say they need average annual returns of 9.8 percent above inflation to meet their financial needs, including providing income in retirement, housing and healthcare expenses. “This is an ambitious goal that could drive investors to take on more risk than they can handle,” said Hailer. With average yearly inflation of 4.2% since 1964, these investors would actually need to earn 14 percent to meet their needs, surpassing the 10% average annual gain of the Standard & Poor’s 500 ® Index over the past 50 years. But, while seven in 10 (71%) investors say asset growth is increasingly a priority over principal protection, 56 percent say they are only willing to take minimal risk to achieve high returns. “This demonstrates a great opportunity for financial advisors and the industry to help educate investors on realistic expectations and strategies to reach their goals,” said Hailer. According to the survey, three-quarters (76%) of investors only own investments they understand well – yet just one-quarter feel their overall investment knowledge is very strong. And, only 12 percent have strong knowledge of investments not correlated to the broader market. When they do make investment decisions, more than three-quarters (79%) of investors say they simply follow their gut instinct. “Fifty-percent have no clear investment goals and 54 percent have no financial plan, so it’s not surprising that when asked how they define investing success – some look at asset levels and others look at comfort level – rather than meeting long-term financial goals,” said Hailer. The two top indicators investors rely on to measure investment performance are (1) the current level of their total assets (50%) and (2) comfort level (49%) with long-term financial success cited only 37 percent of the time. Signs of a Turning Point in Investor Behavior and Expectations Market volatility has eroded confidence for nearly half of investors (49%), and six in 10 no longer believe traditional asset allocation strategies that rely solely on a mix of stocks and bonds are the best way to pursue returns. “Investing today is complicated. And, there’s a lot of noise in the market,” added Hailer. “It’s no wonder investors are conflicted. But, they’re beginning to understand that market indexes may not be the best benchmark for their personal success. They’re looking for a better strategy to help them stay invested for the long term.” In what could be a turning point in investor behavior, attitudes and expectations, Natixis found that 82 percent of investors say they would be willing to set a target for investment returns that is independent of overall market returns. *Eighty-one percent of investors are aware they need to invest using their own goals. *Eighty-four percent of investors say they would be happy to achieve their long-term investment goals, even if they underperformed the market in a given year. In fact, two-thirds (69%) would be happy to achieve 10 percent returns even if the overall market gained 25 percent. Increased Awareness of Risks in Retirement Americans’ willingness to change their approach may be driven by growing awareness that they face increased risks of not having enough income to meet their needs in retirement. Their biggest concern is the uninsured cost of long-term care in old age, which 53 percent of investors identify as a top risk to their financial security in retirement; that’s an increase from 40 percent in Natixis’ 2013 survey of individual investors.^1 Given the increase in life expectancies in the U.S., investors may need income to fund more than two decades of retirement costs, and only 27 percent of investors are very confident their current investment strategy is on track to deliver stable income. Asked where they would turn if their retirement funding fell short, 46 percent of Americans say they will continue to work and 31 percent would rely on support from family members. Only 19 percent expect to be able to rely on the government, a reflection that Americans are beginning to accept the reality that they will be responsible for financial security in retirement. ^1 The June 2013 Natixis Global Asset Management Individual Investor Survey surveyed 5,650 individual investors globally and 750 in the US. About Natixis Global Asset Management, S.A. Natixis Global Asset Management, S.A. is one of the 15 largest asset managers in the world based on assets under management. ^ 1 Its affiliated asset management companies provide investment products that seek to enhance and protect the wealth and retirement assets of both institutional and individual investor clients. Its proprietary distribution network helps package and deliver its affiliates’ products around the world. Natixis Global Asset Management, S.A. brings together the expertise of multiple specialized investment managers based in Europe, the United States and Asia to offer a wide spectrum of equity, fixed-income and alternative investment strategies. Headquartered in Paris and Boston, Natixis Global Asset Management, S.A.’s assets under management totaled $899.9 billion (€652.9 billion) as of March 31, 2014. ^ 2 Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.’s affiliated investment management firms and distribution and service groups include Absolute Asia Asset Management; AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Capital Growth Management; Caspian Private Equity; Darius Capital Partners; Gateway Investment Advisers; H2O Asset Management; Hansberger Global Investors; Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; McDonnell Investment Management; Natixis Asset Management; Ossiam; Reich & Tang Asset Management; Snyder Capital Management; Vaughan Nelson Investment Management; and Vega Investment Managers. Visit ngam.natixis.com for more information. The information contained herein is provided solely for information only and does not constitute a solicitation to buy or an offer to sell any financial products or services. This document may contain references to third party copyrights, indexes, and trademarks, each of which is the property of its respective owner. Such owner is not affiliated with Natixis Global Asset Management or any of its related or affiliated companies (collectively “NGAM”) and does not sponsor, endorse or participate in the provision of any NGAM services, funds or other financial products. NGAM Distribution L.P. is located at 399 Boylston Street, Boston, MA 02116. Natixis Global Asset Management consists of Natixis Global Asset Management, S.A., NGAM Distribution, L.P., NGAM Advisors, L.P., NGAM S.A., and NGAM S.A.’s business development units across the globe, each of which is an affiliate of Natixis Global Asset Management, S.A. The affiliated investment managers and distribution companies are each an affiliate of Natixis Global Asset Management, S.A. ^1 Natixis Global Asset Management (NGAM) is the world’s 15th-largest asset manager based on global assets under management as of December 31, 2012, according to Cerulli Associates. ^2 Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the SEC’s definition of ‘regulatory AUM’ in Form ADV, Part I. 921909 Contact: Natixis Global Asset Management David Snowden, 617-449-2507 firstname.lastname@example.org
U.S. Investors: Some Stuck in Neutral – Some Ready for a Change, Finds Natixis Global Asset Management Survey
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