The internal research by NN Investment Partners, which polled 105 international institutional investors in October 2015 further shows that more than a third of respondents would sacrifice a third of their positive performance in order to protect against losses. Moreover, 27% would choose to give up a quarter, while 15% would sacrifice half.
One in ten responded they would not sacrifice any of the upside performance in their portfolios to protect against volatility.
The research also revealed that 62% of institutional investors are seeking alternatives to traditional bond market exposure. “The prospect of rising interest rates in the next stage of the credit cycle has no doubt focused institutional investors’ minds on the need for alternatives to traditional bond exposures,” said Tarek Saber, lead portfolio manager, NN Global Convertible Opportunities fund.