As the first quarter winds down, investors have been wrestling with heightened volatility and ongoing uncertainty across asset classes. Fed Chairman Jerome Powell remarked: “It’s really hard to know how this is going to work out. In the meantime it’s appropriate to wait for further clarity.”
Our recent report Fear, Fomo and the Future: Insights from the iConnections Global Investor Survey revealed what’s on the minds of 700 global allocators.
Top Challenges
Liquidity, general performance and global macro risks topped the list of challenges investors are navigating, while interest rate risk, inflation and high fees ranked lower.
AI Isn’t The Future…It’s Now
It’s not just a trend in investing. Allocators also reported broad adoption of AI services or tools in their own daily investment or operational workflows.
In fact, allocators seem to be ahead of the curve in AI adoption, with many managers reporting compliance hesitation or challenges in bringing these tools in house.
Themes Driving Risk and Return in 2025
Finally, investors have been spot on in identifying the themes that have driven market performance year-to-date. They cited political or regulatory change, the AI investment supercycle and geopolitical events as catalysts shaping global markets.
Two thirds of allocators are focused on political and regulatory change, and more than half see the AI supercycle as a main driver of market performance.
Expectations of Uncertainty Remain
An additional survey of nearly 30 managers and allocators during a recent iConnections Meetup revealed investors don’t have any expectations of volatility decreasing in the short term. More than 80% of respondents expect higher market volatility for the balance of 2025, following an already turbulent Q1.
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