[Introduction to investment]Invesco Research (Invesco)In the published “Invevesco Global Sovereign Asset Management Research”, the views of 142 Chief Investment Officers, Asset Class Directors and Senior Portfolio Strategists were discussed.sovereign investorsAs portfolios are being adjusted to the new macro environment, one asset class is most attractive.
Introduction to Investment｜Analysis of 142 Chief Investment Officers
Invesco’s research report explored the opinions of 142 chief investment officers, asset class directors and senior portfolio strategists, respectively from 85 sovereign funds and 57 central banks, with total assets under management amounting to US$21 trillion.
Sovereign investors are adjusting their portfolios to the new macro environment due to persistently high inflation and rising geopolitical and climate risks, the report said.
Fixed income most likely to be overweight in strategic asset allocation
The agency mentioned that fixed income is the asset class that sovereign investors are most likely to increase their holdings in strategic asset allocation in the next 12 months, with a net allocation intention of 28%. Other asset classes are:
Infrastructure – 25% Private Equity – 21% Public Equity – 15% Real Estate – 9%
No longer regard fixed income “set and forget” positions
However, Invesco also mentioned that fixed-income assets have not been able to protect investment portfolios from the impact of last year’s (2022) asset price correction, and sovereign investors’ views on such assets have changed.
At present, they no longer view fixed income as a “set and forget” position constructed for diversification, but prefer to take a more active and tactical approach.
71% of sovereign investors expect emerging markets to outperform developed markets
In terms of emerging markets, 71% of sovereign investors expect that the performance of emerging markets in the next three years will be similar to that of developed markets, or even outperform developed markets.
India is seen as leading
As for leading markets, 76% of investors believe that India is an ideal choice for emerging market bond investment this year (2023), others include: South Korea – 56%.
In addition, the attractiveness of Mexico, Brazil, Indonesia and South Africa has increased significantly year-on-year.
Infrastructure seen as the most attractive asset class
On the other hand, Invesco pointed out that the enthusiasm of sovereign investors for private equity assets has not diminished. Among them, infrastructure is regarded as the most attractive asset class in the next five years, surpassing fixed income, private equity and listed stocks.
Among them, infrastructure pointed out that the market has a strong interest in renewable energy power generation, which is partly due to the war in Europe and the ensuing energy crisis.
Real estate seen as least attractive
Real estate is seen as the least attractive sector of private equity assets at present, mainly because of the challenges faced by the office and retail sectors.
Only 13% of sovereign investors think that private equity is not as attractive as before.
Sovereign investors are more determined to invest in the energy transition
Finally, Invesco Research pointed out that sovereign investors are more determined than ever to invest in the energy transition.
Respondents identified two of the top three risks to global growth over the next decade as:
impacts of climate change (66%); and financial costs of the energy transition (53%);
Second only to rising geopolitical risks.
The proportion of sovereign funds that have formulated ESG has increased
In terms of ESG, from 2017 to 2023, the proportion of sovereign funds with ESG policies will increase from 46% to 79%.
Invesco pointed out that it reflected the increased importance of ESG.
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2023-07-10 14:47:30
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