Sovereign Wealth Funds Bullish on Gold, Fixed Income

For Bloomberg, Hideyuki Sano shared some findings from an Invesco survey of sovereign wealth funds and central banks. Invesco surveyed 85 sovereign wealth funds and 57 central banks which manage a cumulative amount of $21 trillion.

The major takeaway is that the group is looking to increase allocations to fixed income and gold due to a combination of higher yields, increased geopolitical risk, and a shaky economic environment. They continue to see inflation as the biggest risk to returns and is one factor in their bullishness on gold. 

Interestingly, the sovereign wealth funds and central banks remain cautious on equities despite the strong rally over the last 9 months. In fact, many are looking to tweak their asset allocation models in order to increase exposure to fixed income as they look to take advantage of higher yields. 

Within the fixed income market, they were most bullish on emerging markets and high-yield. Compared to last year, there was a sharp rise in those who are bullish on private credit funds due to their strong performance over the past couple of years in a challenging environment. 

Finsum: Invesco conducted a survey of 85 sovereign wealth funds and 57 central banks. The major takeaway is increasing bullishness on fixed income and gold due to concerns about inflation and a potential recession.

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• fixed income

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