SURVEY: As Interest Rate Risk Subsides, More Institutional Investors Pessimistic on Earnings Growth

Posted on 12/11/2019


FOR IMMEDIATE RELEASE

SWFI Releases Global Asset Owner Survey for December 2019

Seattle, Washington, December 11, 2019: SWFI has just released its 10th consecutive survey on global asset owners. The asset owner survey is an important measure of global asset owner sentiment and tracks quarterly medium and long-term changes of the views held by these investors. The findings are released on a limited basis to institutional investors that participate as well as news organizations and subscribers to SWFI data services.

The survey sample includes sovereign wealth funds, pensions, superannuation funds and other institutional investors. The sample group of investors is estimated at US$ 2.326 trillion.

“Despite trade tensions, sovereign wealth funds and pensions remain committed to investing in Asia, splitting pools of capital between the various nations. Survey results show that buying high-quality equities is the most crowded trade, supplanting long U.S. technology equities,” says Michael Maduell, President of SWFI. “Geopolitical risks in the U.K., Hong Kong, China, and the Middle East are on the minds of CIOs.”

Subscribers can access the survey at SWFI.com (SWFI Global Asset Owner Terminal) under the Reports tab (then Survey tab).

Survey Period Believes Earnings Expectations for Listed Companies will Rise by More than 10% in the Next 12 Months S&P 500 Earnings Actual, Quarterly Change
Dec 2019 17%  
Sep 2019 7% -1.57%
Jun 2019 19% -0.10%
Mar 2019 21% 0.32%
Dec 2018 21% 2.02%
Sep 2018 39% 6.27%
Jun 2018 50% 5.07%
Mar 2018 44% 3.78%
Dec 2017 31% 2.73%
Sep 2017 32% 2.17%
Survey Period Increasing Cash Allocation in the Next 12 Months Increasing Active, U.S. Equities Allocation in the Next 12 Months
Dec 2019 31% 21%
Sep 2019 38% 13%
Jun 2019 40% 7%
Mar 2019 17% 13%
Dec 2018 47% 28%
Sep 2018 41% 16%

The Largest Potential Risk toward Financial Market Stability

Survey Period Geopolitical Risk Interest Rate Risk Business Cycle Risk
Dec 2019 37% 14% 26%
Sep 2019 39% 7% 21%
Jun 2019 50% 6% 19%
Mar 2019 32% 5% 37%
Dec 2018 34% 3% 24%
Sep 2018 33% 17% 25%
Jun 2018 33% 33% 17%
Mar 2018 40% 40% 8%
Dec 2017 35% 19% 15%
Sep 2017 37% 16% 21%

*Percentages are rounded.

Other notable points
Similar to the 4Q of 2018 survey results, at the end of 2019, more investor respondents desired to overweight Japan and Rest of Asia than underweight.

NOT SHOCKING – Asset owners continue to have a preference to overweight private infrastructure and private equity than to underweight the asset classes.

SWFI will continue to produce these surveys as well as asset owner intelligence from its offices in Seattle, Washington. For more information please reach out to support@swfinstitute.org.

About SWFI
Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund, and central bank events around the world. SWFI is a minority-owned organization.