The U.S. presidential election is the key event of the next 12 months and will shape future global investment opportunities, sovereign wealth funds say.
The International Forum of Sovereign Wealth Funds and Invesco surveyed 24 sovereign investors in late June, asking their views on the outlook for the next year and the impact that the coronavirus pandemic has had on the global economy.
Half of respondents expect Joe Biden, the Democratic candidate, to win the election in November. In that outcome, 58% of funds think the U.S. would return to a more multilateralist stance.
"That said, these respondents were evenly split on whether the U.S. would become more inward-looking or not — suggesting that some sovereign wealth funds believe that a President Biden would need to focus on U.S. domestic challenges in the wake of the Trump presidency and the damage caused by the pandemic," a report of the survey said.
Fewer respondents expect President Donald Trump to win a second term, at 42%; but 90% believe that the U.S. would become more unilateralist or isolationist — and more inward looking — in that case. That suggests it could be harder for sovereign wealth funds to invest in the U.S., the report said.
The report said sovereign wealth funds see a "bipolar tussle" between the U.S. and China, with an expectation that the relationship and tensions between the two economic powerhouses will intensify.