The majority of institutional investors believe the Russian invasion of Ukraine will be the catalyst of a period of high inflation and low employment around the globe, according to new survey by London-based CoreData Research.
The survey, which polled 200 global institutional investors, found about a fifth (18 per cent) of respondents believe the invasion will kickstart a recession worse than the 2008 financial crisis. Despite this, about three-quarters (77 per cent) said they don’t believe central banks should abandon plans to raise interest rates.
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In addition, more than half (57 per cent) of respondents said they haven’t made changes to portfolio allocations to hedge against inflation since the invasion. A fifth (20 per cent) said they believe the best hedge against inflation is in private assets, while a similar proportion (17 per cent) said their organization will raise allocations to private assets due to market volatility stemming from the crisis.
The survey also found the invasion has had an effect on institutional investors’ views about what investments are unethical. Almost a fifth (17 per cent) of respondents said they intend to alter environmental, social and governance strategies to permit investments in defence-related companies, while half (50 per cent) of respondents said they’re undecided about the issue. Another half (50 per cent) said they intend to change ESG criteria to disallow investments in Russian-based businesses.