SURVEY: Slight Majority of Asset Owner Respondents See Stock Market Bubble as Biggest Tail Risk

Posted on 12/14/2020


SWFI Releases Global Asset Owner Survey for December 2020

Seattle, Washington, December 14, 2020: SWFI has released its 14th 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$ 1.27 trillion.

“The ongoing COVID-19 pandemic and its lockdowns remain a key risk for large asset owners, but many institutional investors are making due for the time being as central banks continue to provide ink for the printing press. Sovereign wealth funds and large pensions are growing worrisome of the stock market bubble, seeing it as the largest tail risk in this recent global survey,” comments Michael Maduell, President of SWFI.

He adds, “in 2020, some sovereign investors opportunistically jumped into distressed listed investments to juice up returns, while recognizing the jabberwocky of opinions from backward-thinking advisers.”

Another shift from the previous quarter is that most respondents see geopolitical risk as the greatest toward financial market stability versus a pandemic risk, which was the top choice in the last survey. Credit default risk was also a popular choice in the same question for this recent survey.

U.S. fixed income remains a key underweight, while the asset owner respondents continue to want to overweight private equity, private infrastructure, and credit strategies.

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

Believes Earnings Expectations for Listed Companies will Rise by More than 10% in the Next 12 Months

Period Percent Yes
Dec 2020 47.6%
Sep 2020 41%
Jun 2020 28.20%
Mar 2020 9.40%
Dec 2019 17.10%
Sep 2019 7.10%
Jun 2019 18.80%
Mar 2019 21.10%
Dec 2018 21.10%
Sep 2018 38.90%
Jun 2018 50.00%
Mar 2018 44.00%
Dec 2017 30.80%
Sep 2017 31.60%

*Percentages are rounded.

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.

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