Pursuing your goals with perspective
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Historical patterns can help us understand the present, says Adrian Grey, Global Chief Investment Officer at Insight. He offers an overview of trends investors should consider today, including the role of US policy and why bonds could be particularly appealing.
Building for growth
The asset management industry offers wide scope for new ideas, says David Leduc, CEO of Insight North America. He explains how Insight is questioning traditional approaches to help retirees achieve more.
Rethinking retirement planning with AI
Niamh Smith at Rhotic Media takes a look at how AI is impacting pension plans and their members. From enhanced customer experience to simplifying individual retirement planning, AI could have potential benefits beyond cost efficiency, but plans must navigate the challenges of adoption first.
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As government debt piles up and political room for manoeuvre narrows, the question of fiscal sustainability is no longer a background concern. Gareth Colesmith, Head of Global Macro Research at Insight, considers the implications.
Fiscal fault lines
Macro matters
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There is a growing demand for semi-liquid products.
In 2025, there have been 476 active ETF launches, compared with 234 new passive funds.
Two thirds of investors are looking for increased customisation.
Half of institutional investors expect AI to impact portfolio optimisation and risk management.
Private assets and infrastructure are a major focus for the next three years.
KEY FINDINGS
Asset owners worldwide are adapting to dramatic geopolitical and macro shifts. Mark Buckley, Global Co-Head of Investment Management, Crisil Coalition Greenwich offers insights based on its conversations with investors worldwide.
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SHAHEER GUIRGUIS
Head of Secured Finance
ISOBEL LEE
Co-Head of Global Rates
PETER BENTLEY
Global Head of Fixed Income
FRANCESCA FORNASARI
Head of Currency
Over recent years, securitised markets have been defined by a combination of strong, persistent demand and issuer discipline -deals only come when conditions are right. When spreads widen, issuers pull back, and demand quickly compresses them again, keeping valuations attractive for both sides while naturally dampening volatility.
The eurozone is in a different position to the US. With inflation at the 2% target, the European Central Bank may be close to the end of its easing cycle. US bonds could outperform European equivalents as the Fed catches up. If markets move sideways, consider whether you can increase the relative-value opportunities in your portfolio. For example, you could favour US bonds over Europe.
Yields across bond markets have risen a long way, making them appealing even if credit spreads are tighter. Consider your fixed income exposure. You can look to bond coupons to achieve the returns you need, based on where yields are today.
The long-term dominance of the US economy and the dollar are in question. If international exposure to US assets declines, and domestic US investors seek greater diversification overseas, the resulting shift could be significant. Whatever your starting point, reviewing the geographical spread of your portfolio, and the underlying currencies, seems a wise move given the potential for international movements in capital.
Insight's Global Macro Research analysis and investment perspectives are available to professional contacts on our websites and are highlighted on our LinkedIn feeds.
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Justin Demino
Head of Solution Design, North America
With markets pricing in a considerable number of rate cuts ahead we expect that shorter-dated US bonds may continue to rally. While the labour market is clearly softening which gives the Fed some short-term flexibility, history offers few examples of rate cuts where inflation is still so far above target and the fiscal deficit so wide – these factors could weigh on longer-dated bonds over the medium term.
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Insight in the news
The most important aspect of self-managing, when in a surplus position, is around implementing the proper governance and strategy. When we think about it, first and foremost is, do not endanger participant benefits. So, being mindful of that obligation to ensure that checks continue to hit participant mailboxes for the future of the pension. Only take risk to the extent that it's affordable by the plan.
Insight’s Adam Whiteley, Head of Global Credit at Insight Investment, argues that despite the daily volatility, fixed income is once again delivering on its traditional role in diversified portfolios. Read more in 'The Return of Credit: Quality, Yield, and the Case for Going Global’
FINA. July 2025
Read why liability-driven investing is gaining traction in Germany as investors transition from the savings to decumulation phase and pension schemes consider hedging their interest rate risks. Read more in "Opportunitäten"(German language)
INSTITUTIONAL MONEY, vol 2 2025
Insight worked with the Social Market Foundation (SMF) on a report calling for regulations to allow surplus release for productive purposes for members, employers’ businesses and to invest in the UK economy. Read more in "Think tank makes series of recommendations for DB surplus extraction"
PROFESSIONAL PENSIONS, 2 April
Read how the digital revolution being experienced by bond markets means systematic fixed income is becoming mainstream. These strategies can diversify risks when added to broader fixed income portfolios. Read more in "Fixed income’s digital revolution has arrived, time to adapt"
INSTITUTIONAL ASSET MANAGER, 24 July
Our experts explain options open to US pension plans which have achieved fully funded status, exploring whether they wish to utilize their surpluses through pension risk transfer or continue to manage the plan on balance sheet. Read more in "How Companies With Frozen, Overfunded Pensions Approach the Future | Chief Investment Officer"
CIO MAGAZINE, 1 May
Read why bond markets make fertile ground for alpha opportunities as most core active fixed income strategies, unlike their equity counterparts, have tended to outperform their benchmarks. Read more in "Does active investing make more sense in fixed income than equities?"
INVESTMENT NEWS. 15 April
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Introducing Stanza
Insight's CEO, Raman Srivastava, introduces the purpose behind Stanza and what makes Insight unique.
Facing the future
Longer lifespans mean longer retirements, extending for decades into the future. This poses clear challenges, but Insight is helping our clients to adapt.
The Summer Exhibition 2025 at The Royal Academy of Arts 2025 Summer Exhibition marks almost 20 years of Insight Investment's sponsorship of the UK's best-loved art show. This year, for the first time in its history, it was co-ordinated by an architect, Farshid Moussavi RA.
Interview with Farshid Moussavi RA
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IMPORTANT INFORMATION Material in this publication is for general information only. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This document must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not be duplicated, amended or forwarded to a third party without consent from Insight Investment. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. Forecasts are not guarantees. The information and opinions are derived from proprietary and non-proprietary sources deemed by Insight Investment to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Insight Investment, its officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Telephone conversations may be recorded in accordance with applicable laws.
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Material in this publication is for general information only. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This document must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not be duplicated, amended or forwarded to a third party without consent from Insight Investment. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. Forecasts are not guarantees.
The information and opinions are derived from proprietary and non-proprietary sources deemed by Insight Investment to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Insight Investment, its officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Telephone conversations may be recorded in accordance with applicable laws.
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For those of you who know my predecessor Abdallah, I’m pleased to share with you that we held a series of retirement events celebrating the contribution that he made to Insight. It really was a wonderful send-off for a colleague and CEO reaching his retirement after more than 17 years building, nurturing and leading the firm.
Building on a firm foundation
Just as every great song is crafted from disparate stanzas which combine to create something more, investors can combine investment ‘stanzas’ to create a rhythm that is greater than the sum of its parts.
Why 'Stanza'?
We go beyond the headlines, setting out why a recession in 2026 is not inevitable and explaining that while US policy will have a huge impact, it is not the whole story.
BACK TO HOME
This magazine is where we share what’s on our minds, outline general themes in our business and the industry, and report progress we are making by innovating in key areas within our strategy. We go beyond the headlines, setting out why a recession in 2026 is not inevitable, describe the fiscal fault lines emerging and explain that while US policy will have a huge impact, it is not the whole story. Longer lifespans mean that many retirements will extend for decades. This poses clear challenges for the long-term resilience of retirement investments, and we discuss how Insight is helping our clients to adapt. As new technology opens up new opportunities, we explore some of the ways artificial intelligence is reshaping pension services. We also celebrate 20 years supporting the Royal Academy of Arts and show how Insight has been supports our clients and the communities we work in.
Raman Srivastava, CEO
This spring I proudly took on the role of Insight’s CEO. I can’t stress how much of an honour it is to lead such a talented team, who are constantly pushing themselves and the industry forward. I want to ensure that Insight continues to deliver for our clients on a basis of trust, because trust is at the heart of every effective partnership. It defines who we are, individually and collectively. Insight’s purpose is to partner with clients to reach their financial goals with clarity, confidence and certainty by delivering innovative, tailored solutions. And as partnership needs trust, I believe that it’s important to be open about how we work and think.
The bond market, by far the largest financial market globally, encompasses thousands of companies, most countries, and a wide range of instruments, and provides all the elements an investor needs to achieve their goals. All the tools are at our fingertips. It’s how our experts at Insight use them that sets us apart.
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Many people save for retirement but deciding how to use those savings is a significant challenge. As more people are living longer, their priority is accessing a retirement income that is sustainable for the long term. The onus is increasingly on pension providers to help individuals solve this problem. The situation is different for defined benefit (DB) pension plans, which have promised a retirement income to their members and therefore own the investment problem. In my discussions with such plans it is clear their core focus is to ensure they can afford those promises. While DB schemes are broadly coming from a position of strength, with more assets than they need to cover liabilities and prudent investment strategies, they need to remain resilient in the face of uncertainty and ensure they can afford to pay pensions even if their members live for longer. These are difficult obstacles to overcome, but we are used to working closely with our clients to develop solutions to help them achieve their objectives.
The challenges for Insight's clients
For individuals approaching retirement, the decision often lies between two contrasting options: a fixed, inflexible annuity that provides a guaranteed income; and investing in broader markets, which offer flexibility and growth potential but introduces significant uncertainty. Not only is there ambiguity around whether returns will materialise, but also around the sequence in which they may occur. We believe there is a better approach to retirement investing: one that delivers strategies designed to better align with retirees’ needs compared to traditional annuities. It aims to offers flexibility, potential for growth, and crucially, peace of mind by helping ensure that retirement income remains sustainable throughout retirement. Our goal is to help retirees achieve an income stream that can adapt as their needs evolve.
Helping people invest for their retirement with confidence
Innovations like these mean that retirees can enjoy security along with peace of mind that their income can adapt to their circumstances, even as they grow older. Pension plans now have greater freedom to consider new approaches. Historically, DB pension plans looked to grow their assets to the point that they could fulfil their promises to members, and would then hand over their responsibilities to an insurer. But the strength of these plans today means they can take a new approach. I see more and more of our clients realising that members, and plan sponsors, could benefit from these plans running on for the longer term. We are supporting many as they consider how to make the most of their strength even while they ensure ongoing security for the retirees that depend on them. We are working hard to ensure that our clients can achieve their goals, and I am confident that we can continue innovating to focus on their needs.
Optimism for the future
Many people save for retirement but deciding how to use those savings is a significant challenge. The wrong decision can have severe consequences.
Serkan Bektas, Head of Insight’s Client Solutions Group
For DB pension plans looking to deliver a secure retirement income, we have been helping for decades to hedge their major sources of risk, providing them greater certainty of achieving their objectives. Many of these plans can now invest in resilient portfolios. The investment risks that could affect them are well managed and have been significantly reduced: in decades gone by, pension plans would be at the mercy of the market, but today the markets have much less of an impact. Managing the impact of pension plan members living much longer is another challenge, but we have partnered with some plans to help them deal with this, and we are on the cusp of a new approach that will make this much more accessible for plans at every stage of their journey.
Tackling the longevity challenge for DB pension plans
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More details on our efforts to innovate and help individuals and pension plans achieve their goals are available on www.insightinvestment.com
Source: @2024 United Nations, DESA, Population Division. Licenced under Creative Commons license CC BY 3.0 IGO. United Nations, DESA, Population Division. World Population Prospects 2024. http://population.un.org/wpp/
Percentage of world population aged 65 years or older
By 2050, one in six people worldwide will be over 65, up from one in 10 today. This shift results from longer lives and declining birth rates, fundamentally changing global population age structures. The implications are profound and far-reaching. Governments, businesses and individuals will need to adapt to these trends. But while for some this is a future consideration for the long term, many of Insight’s clients are facing the implications today, as the long-term resilience of retirement investments is a key concern. As they look to overcome these obstacles, I see new innovations presenting fresh opportunities, for individuals and institutions alike.
Longer lifespans mean longer retirements, extending for decades. This poses clear challenges for all retirement savings, and Insight is helping our clients to adapt.
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Observed
The Summer Exhibition 2025 at the Royal Academy of Arts marks almost 20 years of Insight Investment's sponsorship of the UK's best-loved art show.
On an unusually bright London afternoon, the sky an uninterrupted blue, I passed a lively green by Shoreditch Church, walked through the red brick of Calvert Avenue and arrived at Arnold Circus, circled by tenements that once housed Britain’s first council estate. From the top window of a former school building, a voice called me in. Looking up, I was met by the hand of Farshid Moussavi RA waving, blossom hanging from trees all around. When we met, Moussavi had taken on the mantle of the RA’s Summer Exhibition, sponsored by Insight Investment. It was the first edition to be co-ordinated by an architect in the exhibition’s 257-year history. "It’s hard to believe," she said, "but yes." Alongside this year’s hanging committee of fellow Academicians – Tom Emerson and Stephanie Macdonald, Vanessa Jackson, Christopher Le Brun, Helen Sear, Caragh Thuring and Richard Wilson – chaired by RA President Rebecca Salter, she had taken on her task as co-ordinator by rethinking the fundamentals of how the exhibition is structured – beginning, naturally, with architecture. The exhibition has long had a dedicated room for architecture, which has often felt like an anomaly among the art in the rest of the show. Moussavi wanted to change this. "The first thing I thought was: we need to take architecture out of its own confined space," she explained. "We should not be saying different categories of art – sculpture, painting, printmaking – are all mixed up as art, and then architecture goes in a separate room. I’ve always been uncomfortable with the fact that you walk around the galleries and then get to the architecture room, and it becomes very professional." There will be other breaks with convention, including white walls throughout, and a change in the usual route that visitors take through the exhibition.
This year, for the first time in its history, the RA Summer Exhibition was co-ordinated by an architect, Farshid Moussavi RA. Earlier this year she told curator and writer Priya Khanchandani about her new vision for presenting the show.
Moussavi’s chosen theme for the 2025 show was "dialogues", meaning both the dialogue between art and architecture and the capacity of art to open up conversation. It also served as an interpretation tool for organising the exhibition. "In a normal exhibition, there’s a curator who very carefully, over an extended period of time, selects works and puts them next to each other," she explained. "In the Summer Exhibition, that rarely happens." Work is generally hung in a more spontaneous manner, as the hanging committee assesses the submitted works. But Moussavi seemed capable of injecting a refreshing attitude into establishment chambers. In devising a concept for the show, she was keen to invite artists to dismantle received ideas. Her call for entries asked for works that prompt conversation, and invited not only finished artworks but also process material – or, as she put it, works that "emerge through the artistic process" – allowing the exhibition to delve into the messy process of making art and design. It is a distinct characteristic of the Summer Exhibition that anyone can submit their work. The mammoth task of reviewing this year’s 18,000 entries was still under way when I visited, but the works that acted as thematic anchors, from the artists Moussavi and her fellow committee members invited to participate, had been chosen. She showed me some images. They included a series of scraps of clothing recovered from beaches by artist Mandy Barker, captured as cyanotypes in a style inspired by 19th-century seaweed archives. The work intends to engage us with the urgent issue of over-consumption and the consequences of fast fashion. Moussavi practises what she preaches in terms of sustainability, with the smaller sculptural and 3D work in the exhibition displayed on plinths made from hemp that were returned to the supplier afterwards.
Moussavi’s interest in dialogue, and her willingness to challenge, extends from ideas in her architectural work. Her spaces push us to see things in new ways and afford exchange – something that the RA Summer Exhibition, as a social experience, lends itself to well, in comparison to most other art shows. Although her own vision breathes through her work, Moussavi was conscious of the role the artists who submit work play in defining the Summer Exhibition specifically. Critics are sometimes scathing about this aspect. "There’s a lot of birds, a lot of dogs and a lot of trees – and it’s true," she told me with candour, "but it would be bad not to reciprocate the generosity that the public shows by sending in this work. It takes time to create and submit an artwork, and I think many times the reviews miss this side of it."She pointed out that works are for sale and a portion of the proceeds helps fund the RA Schools, to keep the education it offers free. Moussavi was reluctant to agree that this year’s exhibition would be more provocative than it generally is. "I hope people will see the dialogues – between works, between spaces, between themselves and the art. I hope it makes them pause. Think a little differently."
Another work selected for the exhibition that Moussavi highlighted was a set of photographs by Zed Nelson each capturing a genre of artificially created space such as a zoo, a tropical resort or an aquarium, where humans interact with animals as if the setting is genuine. "It shows how we surround ourselves with idealised ideas about the natural world," said Moussavi. Artist Alice Channer was to exhibit a striking sculpture in the RA’s Central Hall that could have been lifted from a car wash but subtly drew attention to our dependence on nature. "She found that in the car industry, the vehicle body goes through a cleaning system which uses the feathers of female ostriches to remove dust between coats of paint," Moussavi said. "It’s interesting that the car industry, which appears to be highly mechanised and artificial, relies on the feathers of birds."
For the grand space of Gallery III, where the floor needs to be kept clear for events taking place during the show, Moussavi planned a suspended hang of three-dimensional works, along with 2D works on the walls. One of the hanging works was a series of sculptural carcasses by Tamara Kostianovsky made from found materials and hung from meat hooks. In the same space was a new sculptural work by Cornelia Parker RA comprising a string of convex mirrors once used to paint landscapes, subverted and hung from the gallery ceiling, so that visitors could look up at the distorted images of themselves. This questioning of perspective, and the chance to see yourself reflected back differently, seemed neatly to encapsulate Moussavi’s curatorial approach. "I’m interested in provoking conversations between ourselves – or just within ourselves," she added. The most direct manifestation of this ambition was perhaps Ryan Gander RA’s piece for the Annenberg Courtyard in front of Burlington House. He was to install large black inflatable balls with white text posing questions that children ask adults (Do ghosts have teeth?). "The work represents the inquisitiveness of children asking things grown-up minds often dismiss as nonsensical or illogical," she said. "Most of them are really difficult questions. They provoke. They make you think. And I think this is the power of a good exhibition.
The Summer Exhibition 2025 at the Royal Academy of Arts, London, 17 June – 17 August 2025, showing artwork by Cornelia Parker RA. Photo: © Royal Academy of Arts, London / David Parry.
Farshid Moussavi, photographed by Paul Phung.
The Summer Exhibition 2025 at the Royal Academy of Arts, London, 17 June – 17 August 2025, showing artwork by Ryan Gander RA. Photo: © Royal Academy of Arts, London / David Parry.
The Summer Exhibition 2025 at the Royal Academy of Arts, London, 17 June – 17 August 2025, showing artwork by Tamara Kostianovsky. Photo: © Royal Academy of Arts, London / David Parry.
The Summer Exhibition 2025 at the Royal Academy of Arts, London, 17 June – 17 August 2025, showing artwork by Alice Channer. Photo: © Royal Academy of Arts, London / David Parry.
A version of this article first appeared in the Summer Issue of the RA Magazine. Priya Khanchandani is a writer, curator and broadcaster.
Children ask things grown-up minds often dismiss as nonsense or illogical. Their questions make you think. And this is the power of a good exhibition.
I’ve been working in bond markets since the eighties. My memory as an investor goes back a long way, but I still can’t remember a time when some new paradigm, tipping point or looming crisis wasn’t dominating the headlines.
If you choose to ignore all the headlines, focusing purely on achieving your goals with minimal risk, you can invest in high-quality bonds today to receive around 5% to 6% per year (source: Bloomberg, as at 31 August 2025). The prospect that borrowers will get into difficulty repaying their loans remains low so, if you were to buy and hold debt, you would benefit from the compounding of returns over time. Looking back on my career, returns like this from the bond market, combined with the certainty that bonds can offer, looks attractive. This is especially true given that the stock market is at long-term highs, with more volatility. If you can identify high-quality companies and industries that will stand firm in the face of trade shocks and political disruption, it’s possible to pursue attractive returns that offer significant certainty. You can even build portfolios to deliver specific cashflows for years into the future, enabling you to make plans with confidence. There are also securitised instruments, such as asset-backed securities (ABS), that can sit alongside traditional bonds and offer another way to focus on your plans for the future.
The case for bonds today
Because we expect Europe’s fiscal expansion to support regional growth, we see opportunities in European credit markets. We are particularly careful when investing in lower- quality bonds, given they are generally more sensitive to economic weakness, and they are issued by companies with higher levels of debt relative to their size.
Time to consider a more global approach?
In 2025, there has been a clear and dramatic shift in the framework of global trade. The US has adopted a protectionist stance, with long-term implications. Although starting to generate meaningful tax revenues, the economic impact of the tariff regime will likely intensify in the months ahead, dampening corporate profits and growth. The Federal Reserve faces a difficult balancing act as political pressure mounts for it to cut rates and tariffs exert upward pressure on inflation, but it appears to be shifting its focus to the softening growth outlook. The balance of risks is tilted to the downside for growth, but we don’t think a recession next year is inevitable if the Fed acts to support growth. The most likely outcome, we believe, is modest US rate cuts later this year, with more decisive rate cuts to come in 2026. That should keep growth positive – just. It is easy to focus on the US given the global impact of the current administration’s policies and rhetoric. But there are other factors at play. The potential productivity boost from artificial intelligence and the impact of countercyclical policy measures elsewhere in the world could both drive significant change. As for AI, large US technology firms are increasing capital expenditure, with investment by global technology companies likely to reach $5.6 trillion by the end of the year (source: Goldman Sachs). Reasonable estimates suggest that AI could add 0.5% to 1.5% to annual GDP in developed markets over the next decade (source: McKinsey, PWC).
US policy will have a huge impact, but it is not the whole story
It is easy to focus on the US given the global impact of the current administration's policies and rhetoric. But there are other factors at play.
The long-term dominance of the US economy, and the US dollar, are in question.
It has been true for many years that holding US assets has been a winning strategy, but the world today suggests this could be about to change. Whatever type of investor you are, reviewing the geographical spread of your portfolio, and the underlying currencies, seems a wise move. The long-term dominance of the US economy, and the US dollar, are in question. The US is set to add substantially to its already heavy debt burden, and the US dollar remains near multi-decade highs. If international investors reduce exposure to US assets, and domestic US investors seek greater diversification overseas, the resulting shift could be significant. You can read our recent analysis on the potential impacts associated with a diverging fiscal landscape here. All this factors into how we see markets today. We favour companies and sectors that offer resilient cashflows through corporate bonds. We favour industries that are focused on their domestic markets and benefit from predictable demand, such as utilities and telecoms, because they tend to be less vulnerable to international trade.
Source: Source: Insight and Bloomberg. Data as at 31 August 2025. Shows US Fed Trade Weighted Real Broad Dollar Index.
Adrian Grey, Global Chief Investment Officer
You have to take each inflection point seriously, and on its own terms. But seeing historical patterns can provide insight. It can help you see through the challenges you face, either to keep a level head – crucial when investing for the long term – or to spot the opportunities that might emerge.
The broad US dollar sits at multi-decade highs
With a global market exceeding $1.2 trillion and growing rapidly, these assets can offer more attractive returns than corporate debt of the same credit rating, or similar returns for less risk, and also incorporate some additional protections for investors. The market includes a wide variety of instruments: for example, more liquid ABS can offer high quality investment exposure with little sensitivity to interest rate movements, while less liquid leveraged finance deals can offer much higher yields and diversification benefits. We believe that customised portfolios, blending public and private assets, can help investors precisely target the returns and risk profile that they need to pursue their goals with maximal certainty. These are just some examples of the variety and flexibility the bond market offers. You can’t predict the next crisis, or guarantee that a company will stand firm through it. But compared to many times in the past, investors can look to bonds for both attractive returns with relative certainty. It’s a good time to consider the bond market. Insight publishes research on a range of macroeconomic and other themes. If you would like to receive this research, please contact us.
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More details on our approach and efforts in ABS markets are available on www.insightinvestment.com
At the same time, governments worldwide are using fiscal measures to stimulate growth, and these are gaining some traction. Notably, Germany’s relaxation of its debt brake and a new €500 bn infrastructure fund include an exemption for defence spending from borrowing limits, while channelling €100 bn into climate infrastructure. China has also launched a package to stimulate its economy that is comparable to its 2008 response, expanding its fiscal deficit and bond issuance to support growth.
In aggregate, US investors are more heavily weighted towards equities, Canadian investors have significant investments in real estate and alternatives, liability-driven investment (LDI) strategies represent about 30% of the UK market, and investors in Continental Europe and Asia have, in aggregate, 60% or more of their assets invested in fixed income (se Figure 1). Another differentiating factor across markets is the use of investment consultants, which ranges from about 90% of investors in the US and UK, 70% in Canada, just under half in the Netherlands, Italy and Japan, and less than 20% in Germany and France. Outsourced CIO (OCIO) is most prevalent in the US and UK where 17% of investors now use a third-party OCIO provider with discretion to manage all or a substantial portion of their portfolio. Looking forward, as investors consider their asset-allocation plans over the next three years, the major focus is on private markets across all regions. This is particularly the case in Continental Europe and Asia, where historical and current asset allocations to alternatives have been lower. As an example, and broadly consistent with other markets, Continental European investors are focusing on private debt, private equity and infrastructure (see Figure 2). Against this backdrop, investors and their consultants are weighing up the geopolitical shifts, looking past the short-term noise to ascertain how best to align their portfolios to meet stakeholder requirements and to take advantage of broader macro changes unfolding.
Mark Buckley, Global Co-Head of Investment Management, Crisil Coalition Greenwich
Institutional investors entered the year with varying asset-allocation profiles across countries and regions.
Source: Coalition Greenwich Voice of Client - 2024 Continental European Institutional Investors Study. Question: Thinking about your firm’s primary (largest) fund or pool of assets, over the next 3 years, do you plan to significantly increase, decrease, or not change your target asset allocation for your largest plan?
1. Increased customisation Over the past years our research indicates that institutional investors are increasingly requiring asset managers to customise offerings to meet their specific needs. Globally, approximately two-thirds of investors say that customisation provided by asset managers is important, ranging from just under 50% in the US and Japan to over 80% in Continental Europe and Asia excluding Japan. This includes custom obligations in the investment agreement, custom operational set-up, and bespoke investment reporting, among other things. Investors note that managers who perform well on customisation stand to gain additional benefits, with 50% of investors saying they are more likely to place another mandate with a manager who customises effectively.
Notable Trends
2. The semi-liquid revolution There is a growing popularity of semi-liquid products – open-ended funds that allow investors to take on exposure to illiquid alternative and private assets while retaining the ability to periodically redeem at least a defined portion of their stake. Asset managers are building on that momentum by rolling out a steady stream of new products and fund structures covering an expanding array of alternative asset types and strategies. That includes both private market specialists, who are expanding franchises into high-net-worth from their mainstay institutional base, and traditional asset managers, many of which are introducing alternative strategies into existing wealth distribution businesses. In addition, a number of partnerships have been announced between traditional and specialist managers. For example, our conversations with intermediary distributors in Asia show that asset managers debuting these products are targeting high-net-worth and ultra-high-net-worth investors through private banks and on third-party fund distribution platforms, and through family offices.
3. ETF Innovation The boom in exchange-traded funds (ETFs) has accelerated with an increase in innovation and product offerings. Over the past decade, the overall size of the ETF market has increased nearly fivefold, now exceeding $16 trillion. For most of the three decades since the launch of the first ETF, growth in assets under management has been driven mainly by the demand for passive investment strategies. That situation has changed dramatically. In the first half of 2025, about two thirds of all ETF launches in the US and Europe have been active investment strategies (see Figure 3). Asset managers are harnessing the versatility, flexibility and liquidity of ETFs to create new actively managed products covering everything from traditional strategies to alternatives.
4. Digital and AI implementation In research conducted with institutional investors in Europe and Asia, a significant majority (79%) of institutional investors said that technology has greatly enhanced reporting and portfolio analysis, while 57% acknowledged improvements in the research process, highlighting the transformative role of digital tools in the research and due diligence process. Two thirds of investors in these markets utilise client portals, with 71% of Continental European investors engaging with these portals quarterly, compared to just 29% in Asia. About half of institutional investors have discussed AI integration with their managers, and they anticipate significant AI-driven enhancements in research and portfolio optimisation. This reflects a growing awareness of AI’s potential to enhance investment strategies and decision-making. Figure 4 shows investors’ views on where AI will have the most significant impact on asset manager’s businesses.
Source: Morningstar, ETFGI, Morgan Stanley.
Source: Coalition Greenwich Voice of Client - 2024 Asian (ex. Japan), Continental European, and United Kingdom Institutional Investors Studies. Question: On which part of a manager’s business do you anticipate AI having the most significant impact?
Source: Coalition Greenwich Voice of Client - 2024 Global Institutional Investors Study.
Some of the market trends that we are following are increased customization, the semi-liquid revolution, ETF innovation, and the implementation of digital and artificial intelligence (AI) technology.
Figure 1: Regional asset allocations of institutional investors
Figure 2: European institutional investors are considering private assets and infrastructure
Figure 3: Many new ETFs are now active rather than passive
Figure 4: Investors’ optimisation of AI impact
Despite that growth, active strategies still represent under 10% of the total ETF market, which in turn is only about one-third of mutual funds globally. Non-traditional assets will contribute to the next phase of ETF proliferation, as will the ability to customize ETF products to meet specialised needs and exposure requests will continue driving new demand among both retail and institutional investors.
We are well-versed in helping pension plans invest so they can fulfil their promises, delivering the outcomes they seek against the benchmark they set. Knowing how our expertise has helped large institutions, we saw the potential to apply this approach to help individual investors achieve their goals.
Adapting our approach for individuals might be clear in principle but is complex in practice. First we need to focus on where our expertise matters, and how we can help these investors most – our agility as an investment boutique with a technical edge in bond markets, research, and a focus that targets outcomes rather than only chasing returns. We also offer the inherent strengths that BNY has in abundance, such as its global footprint and the technical acumen that comes from its investment in Archer and Charles River.
Remaining true to our principles
Insight’s unique SMA platform is designed to enable this and other solutions. Technology has been key to enabling this shift, allowing advisors to deliver solutions to individuals that were once only available to larger institutions. We have upgraded our operational infrastructure so we can customize bond portfolios concurrently for hundreds of thousands of individual accounts. We believe this technology, combined with our research capability, fixed income programs and our expertise in cashflow-driven investing, establish a solid operational and investment foundation. This means we are positioned to support providers who already use SMAs, and advisers just starting to use them. Our municipal and taxable fixed income programs are designed so that broker dealers can use them as building blocks on their own SMA platforms, to support distributors customizing portfolios for wealth management clients. As the fixed income specialist manager within BNY, this year we have been working hard to transition fixed income colleagues from BNY Wealth, including municipal bond specialists, to Insight with around $30 billion in assets under management.
Knowing how our expertise has helped large institutions, we saw the potential to apply this approach to help individual investors achieve their goals.
We have upgraded our operational infrastructure so we can customize bond portfolios.
The US wealth management market is $20 trillion in size, and separately managed accounts (SMAs) for individuals account for $2 trillion. Of these, around 40% of SMA assets are in fixed income (source: Cerulli Associates). We expect this to grow rapidly as investment advisors have an increasing preference for personalising portfolios to an individual investor’s needs with the flexibility to directly own the bonds they are investing in through an SMA, rather than choosing off-the-shelf mutual funds.
Source: Cerulli Associates – US Managed Accounts Annual Report, July 2025. Total separately managed account assets are the total of Cerulli's “manager-traded single-contract SMA”, “manager-traded dual-contract SMA", “proprietary SMA”, and “SMA in UMA” sizings.
David Leduc, CEO of Insight North America
Total retail SMA assets (2014-2028 estimate)
The growth and relevance of the asset management industry has been dependent on innovation to meet the evolving needs of investors. If you have an idea that can help people and the expertise to implement it, there is the freedom to challenge assumptions and disrupt the market.
Investments in technology enable personalised cashflow-driven portfolios for individuals
A personalized bond portfolio, which looks to deliver set retirement income cashflows regularly over time, could give many investors the combination they are looking for when they retire – a secure certain cashflow, in line with their personal needs, incorporating flexibility if their circumstances change.
One area we are focusing on is retirement, where growing numbers of retirees are responsible for managing their accumulated assets rather than depending on pension plans to provide their retirement income. This is a growing challenge, as highlighted in a landmark report by OliverWyman, Longevity Unlocked, Retiring In The Age of Aging.
Our municipal and taxable fixed income programs are designed so that broker dealers can use them as building blocks on their own SMA platforms, to support distributors customizing portfolios for wealth management clients. As the fixed income specialist manager within BNY, this year we have been working hard to transition fixed income colleagues from BNY Wealth, including municipal bond specialists, to Insight with around $30 billion in assets under management.
More details on our efforts to innovate and develop personalised bond investing at scale are available on www.insightinvestment.com
From enhanced customer experience to simplifying individual retirement planning, AI could have potential benefits for pension plans and their members beyond cost efficiency, but plans must navigate the challenges of adoption first.
While AI-driven efficiencies will likely enhance basic aspects of the pension plan member experience, one senior pension professional highlights AI’s potential to transform customer service. “The machine can do the easy part, leaving the more complex and technical elements, such as vulnerable members, to specialists,” they say. “This should be the aspiration – and it’s in the industry’s interest to engage.” This is supported by a Pensions UK survey, which found that 79% of plan members expect pension funds to adopt AI by 2035 to improve engagement and communications. Additionally, 63% anticipate using AI to personalise retirement planning, including advice and guidance. AI tools can leverage scheme and member data to deliver personalised communications about pensions. Additionally, AI chatbots can offer accessible, cost-effective financial guidance, further enhancing the member experience. “The adoption of AI throughout the pensions industry should be viewed as a positive development,” the pension plan professional notes. “AI is already reducing costs for plans and members by increasing efficiency, improving communications and member engagement.”
Deliver an enhanced customer experience
Even though use cases of AI often focus on improving efficiencies, Pi Partnership’s report found increasing interest among some pension providers in retirement visualisation tools. These tools use AI to let members ask questions such as, “I want to do XYZ – can I afford it?” Michelle Darracott, a professional trustee at BESTrustees, a UK service provider, agrees, “There's lots of applications from an efficiency perspective,” she says. “But it could be super powerful in helping individuals to imagine what their retirement could be like.” She explains that many members struggle to understand how much they need to save for retirement, as they must balance long-term goals with immediate priorities, which often feel far more urgent. She notes that the tool could first help members clarify their retirement goals – whether that’s travelling, spending time with grandchildren, or pursuing new hobbies – and then show them the likely costs, helping them understand how much they need to save.
Despite AI’s potential benefits for plans and their members, several barriers still hinder full adoption. According to one pension professional, the cost of adopting AI is one. “The underlying issue is that most plans are starting from a very low base and lack the capacity – and maybe budget – to get such projects off the ground,” they say. However, they emphasise that while implementing an AI solution requires short-term investment and effort, the long-term benefits are significant and can be realised quickly. McKinsey research supports this, showing that AI can help asset managers cut costs and improve efficiency, with workflow automation saving 25%-40% of total costs. Darracott adds that another challenge is the pension industry’s cautious approach to AI. Many are hesitant to adopt it widely, preferring to wait and learn from the experiences of early adopters.
The roadblocks to AI implementation
The machine can do the easy part, leaving the more complex and technical elements, such as vulnerable members, to specialists.
Niamh Smith, Rhotic Media
There is a growing recognition of AI’s potential to strengthen investment strategies and decision-making. For example, about half have discussed AI integration with their managers, and they anticipate significant AI-driven enhancements in research and portfolio optimisation. According to one piece of research, AI can be used to improve reporting and portfolio analysis, which is evidenced as Coalition Greenwich’s research reveals that 79% of institutional investors in Europe and Asia believe technology has significantly improved these areas. Another senior pension professional echoes this view but notes that even though AI is expected to enhance investment decisions, its impact will likely be felt more by asset managers than by the pension plans themselves. “With investment, it’s the asset managers that are going to benefit from AI in these areas the most,” they say. “With the tools currently available for asset allocation, and even scenario modelling already doing an adequate job, there may be some enhancements.”
A senior pension professional agrees, warning that if plans themselves don’t engage, banks or even trusted non-industry players like telecoms providers could step in. “AI offers the solution, and someone will use the technology to provide it,” they say. “It’s a huge opportunity for schemes and a wake-up call.” From boosting operational efficiency to enhancing member experience and enabling personalised retirement planning, AI holds the potential to deliver smarter, faster and more meaningful outcomes. Insight has a range of initiatives underway which employ machine learning and artificial intelligence techniques. For additional perspectives please visit www.insightinvestment.com.
More details on our efforts to innovate are available on www.insightinvestment.com
Navigating the new era of sovereign risk
2025 marks a turning point for government finances worldwide. As debt piles up and political room for manoeuvre narrows, the question of fiscal sustainability is no longer a background concern – it’s front and centre for investors, policymakers, and markets alike.
For investors, the implications are clear: fiscal sustainability is now a key driver of asset performance.
Gareth Colesmith, Head of Global Macro Research
Across the globe, the fiscal landscape is diverging. Some countries, like Norway, Ireland, and Portugal, are emerging as models of prudence, boasting strong or improving budget balances. Others, including the United States, China, and France, are grappling with persistent deficits and rising debt burdens. Germany, once the poster child for fiscal discipline, is now loosening its purse strings to fund defence and infrastructure, risking its coveted AAA rating in the process. Meanwhile, the UK and New Zealand are on a path to improvement, but challenges remain.
Assessing the outlooks of the G7 economies
Source: Insight analysis, as at 7 August 2025. Adapted from Fiscal fault lines: a global review of sovereign fiscal health, September 2025, Insight Investment.
World at a crossroads
In the United States, a sweeping Republican tax bill has delivered on campaign promises but at a steep price: $4.1 trillion added to the national debt. The result? Fiscal cliffs loom, public disapproval is widespread, and the US now stands out as one of the most vulnerable major economies. Interest costs are rising for longer maturity bond issuance, and the country’s gross financing needs exceed 30% of GDP – a level matched only by Japan. It is little wonder that investors are considering a more global approach for their portfolios. Europe is also at a crossroads. Germany’s decision to relax its constitutional debt brake has set the stage for a €500 billion investment drive, leading the EU in defence spending and infrastructure renewal in a push to boost growth.
Fiscal sustainability will drive markets
For investors, the implications are clear: fiscal sustainability is now a key driver of asset performance. Countries with unsustainable debt and weak reform momentum face higher yields, steeper curves, and currency depreciation. Those with monetary sovereignty have more tools in a crisis but also higher long-term inflation risks, while others must tread carefully. As markets adjust, portfolio positioning must evolve – and governments must act before markets force their hand. Insight publishes research on a range of macroeconomic and other themes. If you would like to receive this research, please contact us.
China, for its part, is shifting the burden of debt from local governments to the centre, using targeted stimulus and a massive ¥12 trillion debt swap. This has pushed China’s debt-to-GDP ratio into the high 60% range and exposed hidden liabilities, raising questions about long-term sustainability. Emerging markets present a mixed picture. South Africa’s missed opportunities for fiscal reform, Brazil’s inflation-linked pension liabilities, and Mexico’s growing contingent liabilities all highlight the unique challenges these economies face. Yet, many emerging markets remain more resilient than their developed peers, often thanks to more robust macroeconomic frameworks.
Global Macro Research from Insight
Insight’s Global Macro Research analysis and investment perspectives are available to professional contacts on www.insightinvestment.com
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