Key Takeaways
- • Portfolio diversification (84%) and downside protection/capital preservation (83%) have displaced long-term capital growth (61%) as investors' top priorities, according to Schroders' Global Investor Insights Survey 2026 of over 1,000 professional investors across 24 countries.
- • 85% of surveyed investors expect elevated volatility over the coming year, driving a fundamental reassessment of equity allocations away from pure growth strategies toward resilience-focused approaches.
- • 85% of respondents express confidence in active management's ability to meet investment objectives over the next 12-18 months, with global equities (37%), small/mid-cap equities (32%), and real assets (28%) identified as top beneficiaries of increased active allocations.
- • The shift reflects a macro environment characterized by geopolitical fragmentation and supply-chain restructuring that creates inflationary risks, replacing the deflationary dynamics and globalized market conditions of prior years.
Summary
Global investors are fundamentally recalibrating portfolio construction in response to a more volatile and fragmented macroeconomic environment. The Schroders Global Investor Insights Survey 2026, based on responses from professional investors across 24 countries, reveals that capital preservation and diversification have supplanted pure capital growth as the dominant portfolio objective. While long-term capital appreciation remains a stated requirement, it has fallen to third priority behind portfolio diversification and downside protection—a substantial reorientation in investor thinking that reflects mounting uncertainty about near-term market conditions.
The survey data indicates a near-universal expectation of persistent volatility: 85% of respondents anticipate elevated volatility over the coming 12 months. This forward-looking anxiety is translating into concrete portfolio shifts. When asked to rank primary objectives, 84% cited portfolio diversification and 83% cited downside protection or capital preservation, compared to just 61% prioritizing capital growth. This divergence signals that institutional investors are no longer willing to accept drawdown risk as an acceptable tradeoff for long-term appreciation.
Active management has emerged as the primary tool investors intend to deploy to achieve these objectives. An overwhelming 85% of respondents express confidence that active management can deliver their investment goals over the next 12-18 months—a sharp contrast to industry trends favoring passive indexing. When asked where active management would provide the greatest benefit, global equities lead at 37%, followed by small/mid-cap equities (32%) and real assets (28%). This allocation strategy reflects a more nuanced approach to equity investing: rather than passive market-cap weighting, investors are seeking active managers who can blend capital appreciation with volatility dampening and diversification benefits.
Schroders Group Chief Investment Officer Johanna Kyrklund contextualized the shift as a response to structural economic changes. The world has transitioned from a globalized, deflationary environment prone to demand-side shocks to a geopolitically fragmented system where supply-chain restructuring creates inflationary pressures. This fundamental recalibration of macro risk—from deflation to inflation, from integrated to fragmented supply chains—explains why traditional growth-at-all-costs equity strategies no longer align with investor mandates. The outcome is a more deliberate, outcome-oriented approach to equity allocations that prioritizes portfolio resilience alongside growth potential.
The survey data indicates a near-universal expectation of persistent volatility: 85% of respondents anticipate elevated volatility over the coming 12 months. This forward-looking anxiety is translating into concrete portfolio shifts. When asked to rank primary objectives, 84% cited portfolio diversification and 83% cited downside protection or capital preservation, compared to just 61% prioritizing capital growth. This divergence signals that institutional investors are no longer willing to accept drawdown risk as an acceptable tradeoff for long-term appreciation.
Active management has emerged as the primary tool investors intend to deploy to achieve these objectives. An overwhelming 85% of respondents express confidence that active management can deliver their investment goals over the next 12-18 months—a sharp contrast to industry trends favoring passive indexing. When asked where active management would provide the greatest benefit, global equities lead at 37%, followed by small/mid-cap equities (32%) and real assets (28%). This allocation strategy reflects a more nuanced approach to equity investing: rather than passive market-cap weighting, investors are seeking active managers who can blend capital appreciation with volatility dampening and diversification benefits.
Schroders Group Chief Investment Officer Johanna Kyrklund contextualized the shift as a response to structural economic changes. The world has transitioned from a globalized, deflationary environment prone to demand-side shocks to a geopolitically fragmented system where supply-chain restructuring creates inflationary pressures. This fundamental recalibration of macro risk—from deflation to inflation, from integrated to fragmented supply chains—explains why traditional growth-at-all-costs equity strategies no longer align with investor mandates. The outcome is a more deliberate, outcome-oriented approach to equity allocations that prioritizes portfolio resilience alongside growth potential.
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