LONDON, 13 May 2013 – 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 and debt to be the key growth areas in client portfolios in 2013.

At its recent Fund Manager Conference, Aon Hewitt surveyed over 120 fund managers, representing over £10 trillion of assets under management, asking them about their attitudes towards asset allocation and investment strategy in the medium-term.

Lennox Hartman, global head of fixed income strategies, at Aon Hewitt said:
“With the backdrop of persistent weak economic data across western economies and a relentlessly low gilt yield environment, the main message from 50% of fund managers attending this year’s conference is that emerging market equities are most likely to attract increased allocations in client portfolios over the next 18 months.

“As sluggish growth rates continue across Western economies, institutional investors are looking further afield, beyond domestic equities, for positive returns. Despite the relative under-performance of emerging market equities in the first quarter of the year, we understand this trend to be part of a much wider strategy among institutional investors in their quest to outperform long-term liabilities.”

Key findings from the survey showed that fund managers believe institutional clients will increase allocations to the following asset classes over the next 18 months:

The survey also showed that fund managers believe that institutional clients will decrease allocations to investment grade credit and fund of hedge funds.

Guy Saintfiet, UK head of liquid alternative strategies, at Aon Hewitt said:
“Unsurprisingly, given the expectation among fund managers that investment-grade credit will deliver the weakest returns during 2013, allocation to this asset class is projected to decrease over the course of the year. With tight credit spreads and historically low gilt yields, this asset class has clearly lost favour among institutional investors.

“The fund of hedge funds business model has been under pressure for a number of years now and as investors seek uncorrelated sources of returns, there is a clear need for more sophisticated approaches to obtaining the best returns. We have seen increased investor appetite for bespoke portfolio solutions rather than taking the search route via fund of hedge funds; it is therefore no surprise that our fund manager survey indicates that allocations to fund of hedge funds are likely to continue to be affected as investors seek a more bespoke approach to constructing their portfolios in 2013.”

Media Contact: 

Colin Mayes                                     Giles Abbott
Aon Hewitt                                        Capital MSL
01372 733689                                    020 7307 5340
colin.mayes@aonhewitt.com               giles.abbott@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 65,000 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, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.