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The “new normal” catch phrase emerged after the Great Recession, marking a new era in investment management. Predictions of high correlations, muted returns, increased volatility and sustained low interest rates were true for a period. But fast-forward to 2017, and this period seems to have come to an end. Correlations have declined, the Dow Jones Industrial Average broke 20,000, the VIX stabilized and the Federal Reserve raised short-term interest rates in a show of confidence in the strength of the US economy. One could use the term “utopian,” perhaps, for characterization of recent market events.
At the same time, US politics has deeply divided the country across economic, gender, racial, religious and philosophical lines. Trust in political leadership is at an all-time low, and book sales of George Orwell’s 1984 are near all-time highs. Many view the current landscape as a “political dystopia.”
The timing of our US Institutional Investor Brandscape® survey, released to clients today, catches institutional investors at the intersection of this market utopia and political dystopia. In a world conflicted, these institutions are the epitome of stalwartness. They are resolute when there is anxiety all around them and within, yet they are also optimistic and welcoming to new ideas that will further their mission. It is this stability, predictability and openness that makes institutional investors invaluable to asset managers as a target market.