A lot will depend on the vaccine rollout and how fast the world recovers.

The active and passive question comes to valuations, Dwek said. “Ultimately when you are expecting this type of rotation or you’re thinking that you’re going to get more dispersion in the returns, it’s better for active management. Given some names that have really run up this year, where people think maybe fundamentals haven’t quite followed, you kind of are hoping to have that active manager pick and choose those opportunities and those winners where you’re still getting a good deal compared to intrinsic value.”

With the market at such great heights, and the economy struggling, it’s thought that maybe a correction is at hand, but the bulls say there are other forces at work.

Janasiewicz said investors' risk appetite has been just as important as valuation. “Risk appetite is what drives the market,” he said. “Think back to the mid-’90s, ’94 for example, when the [Alan] Greenspan Fed raised rates … yet that was one of the best periods for equities to run from a total return perspective. Why is that? That’s because risk appetite was very strong, increasing the borrowing rate.”

Sixty-six percent of the institutional investors thought information technology would outperform, while 65% of them said health care would. Forty-two percent said communications services would outperform. On the flip side, 42% said energy would underperform the market and 44% said real estate would.

Tech is no longer a luxury item, Janasiewicz said. An online presence is no longer a luxury item. That’s going to help the long-term prospects for tech and so it will continue to drive the market.

The 2021 Natixis institutional outlook fielded responses from 500 institutional investors, including 146 corporate pension plans, 99 endowments and foundations, 104 public or government pension plans, 130 insurance companies and 21 wealth sovereign funds.

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