Most institutional investors say the market is underestimating COVID-19’s long-term impact on the economy, a Natixis survey finds

A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak in New York
A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak in New York.

  •  A new Natixis Investment Managers survey of  500 institutional investors found that 8 in 10 say the market is underestimating the pandemic’s long-term impact on the economy.
  • The results reveal a stark contrast to calls from more bullish voices, like Wharton’s Jeremy Siegel who says the economy and stock market will be stronger than expected in 2021.  
  • The survey also highlighted the sectors investors anticipate will outperform in 2021, and the areas they’re most concerned about heading into next year.
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Eight in 10 institutional investors say the market is underestimating the COVID-19 pandemic’s long-term impact on the economy, and 79% don’t expect a full economic recovery until 2022 or 2023.

That’s according to the recently released Institutional Investor Outlook survey from Natixis Investment Managers. The firm surveyed 500 institutional investors who collectively manage more than $13 trillion in assets in 29 countries. 

The survey results reveal a stark contrast to more bullish calls on the economy, like Wharton’s Jeremy Siegel who says the economy and stock market will be stronger than expected in 2021.  

The S&P 500 continues to break new records, but over three quarters of investors are wary of assuming that run will continue- 78% of institutional investors say current market growth is unsustainable, while 95% see the potential for a market correction in at least one sector. 

Read more:The equities chief at $1.4 trillion Franklin Templeton says stocks are ‘priced for perfection’ – but investors still shouldn’t wait to get in. He tells us 9 ways they can get the market-beating returns.

According to Natixis, investors are most concerned over a correction in real estate, technology, and cryptocurrency. 

However, technology and healthcare are two sectors investors expect to outperform in 2021. 66% expect technology to outperform in 2021, while 65% expect healthcare to exceed expectations. But investors anticipate more beaten-down sectors of the market, like real estate, financials, and industrials to continue to underperform.

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