SWFs expected to lower equity exposure
Equity allocations were the most common asset class expected to be reduced by sovereign wealth funds in the next 12 months, according to report from Invesco. Infrastructure and real estate were those most expected to be increased. Rises in fixed-income allocations, which typically see an increase ahead of expected market volatility, were expected by 22% of the respondents, on par with equity projections. Overall exposure to Asia was the most common region targeted for increase, while European exposure was most targeted for reduction.
North American infrastructure deals were the most cited for future investment in the asset class followed by those in the respondents' respective home markets.
Among the funds surveyed 35% expect the current economic cycle to end in the next six to 12 months, while 54% saw the economic cycle ending 12 to 24 months from now. The chief concerns of respondents were trade tensions between the U.S. and China, Brexit and a return to a more normal monetary policy.