KEY
TAKEAWAYS
Emerging
markets remain a mixed prospect, with some allocators in the Southeast adopting
a cautious stance due to recent volatility centered around the U.S. election,
while others retain diversified exposure to capture selective opportunities. Geopolitical
tensions, supply chain pressures, and shifts in international policy have
heightened the focus on flexibility and risk management, with many investors
prioritizing adaptability to navigate shifting conditions. In response to
potential recessionary pressures, U.S. Treasuries and the U.S. dollar are
favored over gold for their liquidity and stability. At the time of this survey
in late October, sector allocations in equity portfolios were largely
unchanged; however, this is widely expected to shift throughout the remainder
of 2024 in anticipation of President Trump’s second term.
Allocators
in the Southeast are telling a story of a careful approach to integrating AI
and big data, driven by concerns over data reliability, implementation costs,
and the scalability of these technologies within complex investment frameworks.
Where being applied these tools are primarily being used supplement traditional
analysis rather than as central drivers of decision-making. However, in
quantitative strategies, machine learning and AI are gaining traction for
enhancing risk management and identifying patterns, though most allocators
prefer a balanced approach, viewing these technologies as too nascent for fully
reliable quantitative strategy development. We will watch how these preferences
grow; however, for now, blending innovation with established practices
underscores the region’s cautious but adaptive investment outlook to AI
integration.
Real estate
debt and infrastructure financing remain popular for their stable return
profiles across the region, fitting well within long-term strategies focused on
income generation hedging against current volatility. In the credit markets,
direct lending and distressed debt remain favored by many allocators for their
high-yield potential. Within fixed income, investors are effectively managing
liquidity by prioritizing high-quality, liquid securities and partnering with
prominent hedge fund managers to capture short-term alpha. These strategies all
reflect a cautious outlook as the 47th President’s inauguration approaches.
Time will tell how these choices will play out.
