A long-term portfolio's core holdings are the most important investments. It is critical that the core investments in the portfolio have a track record of dependable service and consistent returns. Investing in an asset that tracks the overall market for an extended time horizon is a common strategy used by investors. They will then add specific stocks or exchange-traded funds (ETFs) to that asset. A well-diversified portfolio's core investments tend to outperform a portfolio comprised entirely of growth stocks. A portfolio with consistent and reliable core investments will benefit from stable growth in safer economic sectors while also taking advantage of growth opportunities in non-core investments. Since, as long-term portfolio with core holdings only contains a few investments, it is also easier to monitor and rebalance. Furthermore, investors can expect less volatility and drawdowns with this strategy than with an actively managed portfolio. Taxes and trading commissions can have a negative impact on returns, but this can be mitigated by doing so. Therefore, the surge in demand for the core investments is expected to boost the core investment market growth in the upcoming period.
Top Impacting Factors: Market Scenario Analysis, Trends, Drivers, and Impact Analysis
Enhancement of risk-adjusted returns and leveraging of growth opportunities present in other sectors are driving the growth of the market. In addition, the odds of good returns in a short time is one of the factors that fuel market growth. However, the complication of investments over time might hamper the market expansion. On the contrary, convenience and fair pricing of assets is expected to provide lucrative opportunities for the market in the upcoming years.
The global core investment market trends are as follows:
Enhancement of Risk-Adjusted Returns:
During a market downturn, a well-diversified portfolio can better absorb the shocks. When an investor invests in various asset classes, the risk will spread out. This is yet another significant advantage of diversifying the portfolio. When two portfolios produce identical returns, the diversified one takes less risk than the concentrated one. The latter is expected to be more volatile than the first. In addition, the underperformance of one asset class is compensated by the performance of another asset class. So, a well-diversified portfolio allows an investor to better manage their losses. As a result, having a diversified portfolio that invests across asset classes is critical for better risk-adjusted returns. Therefore, the enhancement of risk-adjusted returns helps in driving the growth of the core investment market size during the forecast period.
Leveraging of Growth Opportunities Present in Other Sectors:
Every economy undergoes a cycle. Markets rise, fall, stagnate and rise again during a cycle. One can better weather market cycles and profit from their bullish run if they diversify their portfolio. When an investor invests in a variety of assets in a variety of sectors, they can take advantage of the various growth opportunities available. It also aids them in profiting from a market rally following a crash. This is not the case with a non-diversified portfolio that is heavily weighted in a single asset class. Markets frequently experience cycles in which one sector outperforms the others, and one can only benefit if they have exposure to that sector. Therefore, the leveraging of growth opportunities present in other sectors are driving the growth of the core investment market share during the forecast period.
COVID-19 Impact Analysis
- The first quarter of 2020 has been exceptionally affected the core investment market growh as a result of the COVID-19 situation. When the markets recovered, however, the losses were more than made up for by much better performance. Despite suffering losses in the first quarter, the market managed to return a reasonable percentage of the three-quarter average performance.
- Due to the COVID-19 pandemic, investors redeemed more than planned in 2020, as cash became a premium for a variety of investor types, including hospitals and healthcare systems. At the same time, the pandemic slowed down the allocation process for investors. It can be deduced that, even though the COVID-19 pandemic has hit the markets and disrupted investor allocation processes, investors have adapted to the situation over time.
Key Benefits of the Report
- This study presents an analytical depiction of the global core investment market along with the current trends and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and opportunities along with a detailed analysis of the market share.
- The current market is quantitatively analyzed to highlight the global core investment market growth scenario.
- Porter’s five forces analysis illustrates the potency of buyers & suppliers in the market.
- The report provides a detailed market analysis depending on the present and future competitive intensity of the market.
Questions Answered in the Core Investment Market Research Report
- Which are the leading players active in the global core investment market?
- What are the detailed impacts of COVID-19 on the market?
- What are current trends that would influence the market in the next few years?
- What are the driving factors, restraints, and opportunities in the global core investment market?
Core Investment Market Report Highlights
By Enterprise Size
By Industry Vertical
Key Market Players
BlackRock Inc., Sayles & Company, L.P., Invesco Ltd., Morningstar Inc., Janus Hederson Group Plc, Loomis, GuideStone Funds, Dodge & Cox, Saturna Capital Corporation, Capital Group, Voya Investment Management LLC