According to the SWFI Global Asset Owner Survey taken in August 2017, institutional investors are looking to overweight in international and global equities, while pulling back in listed infrastructure and U.S. passive fixed income. The quarterly survey targets sovereign funds, pensions, endowments, superannuation funds, foundations, government funds, family offices and other asset owners. Totaled estimated survey sample size was US$ 1.012 trillion of assets under management. The clear majority of respondents have a long-term orientation.
Only available for participants and subscribers.
Here are some key findings:
U.S. tax reform is to be the largest driver of equity prices in the next 6 months. The price of oil was second.
A majority of respondents plan to increase allocation to Europe, ex-UK in the next 12 months.
30.77% of the respondents plan to decrease allocation to credit strategies in the next 12 months.
A majority of respondents see geopolitical risk as the greatest factor against financial market stability.
Long High-Quality Equities appears to be the most crowded trade for now.
About 27% of the respondents plan to increase allocation to emerging market debt in the next 12 months.
“Pensions and sovereign funds see U.S. tax reform as a major boon for equity prices,” says Michael Maduell, President of SWFI.
He adds, “Geopolitical risks in the Middle East and parts of Asia, including North Korea, remain in the psyche of global asset owners. According to the survey results and SWFI data, sovereign funds and long-term asset owners are cherry picking investment opportunities in Europe, ex-UK.”
More About the Global Asset Owner Survey
This is SWFI’s inaugural quarterly survey for asset owners. To participate in the next quarterly survey, CONTACT firstname.lastname@example.org.
SWFI intentionally excludes 3rd party asset and fund managers in this survey. As an independent authority on asset owners, SWFI feels that it is uniquely qualified and strategy agnostic to show a true “lay of the land”.
The worst fears of the Federal Reserve may be coming true. The barbarous relic is once again offering some resistance to Fed policy as it maintains its uptrend from mid-November, and is being snapped up from central banks worldwide. Former Fed chairman Paul Volcker shared the central bank view that “Gold was the enemy.” If so, the enemy is gaining ground. China’s gold reserves quietly grew from December 2018 to February 2019. The People’s Bank of China disclosed in February 2019 that it increased its gold reserves by 10 tonnes that month, following purchases of 11.8 tonnes in January 2019, and 9.95 tonnes in December 2018. Goldman Sachs has listed central bank purchasing as the reason for the uptrend. Goldman Sachs expects to see gold at US$ 1,400 over the next six months, which would lift it well above its long-held resistance at US$ 1,350. China’s gold holdings are now US$ 79.5 billion. China, which is emphasizing diversification from the U.S. dollar, has been a fan of precious metals for years, and it has been encouraging its citizens to purchase gold and silver for a decade, when previous controls on precious metals were done away with. Now anyone in China can trade gold internationally with the swipe of a card.
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