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Institutional Allocator: E&F's Eye Volatility as US/ SINO Trade War Threat Looms

August 3, 2018 / by NEPC

Endowments and foundations are addressing concerns about how a looming trade war between China and the U.S. could affect their investment strategies. Volatility in the markets, created by the tit-for-tat tariff pronouncements, coming from both President Donald Trump and Chinese president Xi Jinping, has many investors on edge, with no clear end to the disputes in sight. That said, many are taking a long-term approach rather than reacting to daily market gyrations, and some are looking at the volatility as an opportunity to grab deals.

“Our view is the current trade dispute with China is likely to be a prolonged issue, and investors should expect ongoing tariff discussions with China to be the “new normal.” With that, we expect market volatility for both U.S. and Chinese equities to be elevated relative to recent years, but the trade disputes do not materially alter our long-term views,” said Phillip Nelson, partner and director of asset allocation at consulting firm NEPC.

According to a recent report, NEPC Endowment and Foundation Survey, released by Boston-based consultant, a whopping 78% of the 47 endowments and foundations surveyed said that they are “moderately concerned” about the prospect of a full-on trade war between the two countries, with 11% indicating their level of concern is “very high.” Another 11% say that they are not concerned.

Read the full story on Institutional Allocator's website here. 

Topics: Press Coverage, Endowments & Foundations

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