SURVEY: As Interest Rate Risk Subsides, More Institutional Investors Pessimistic on Earnings Growth
Posted on 12/11/2019
FOR IMMEDIATE RELEASE
SWFI Releases Global Asset Owner Survey for December 2019
Seattle, Washington, December 11, 2019: SWFI has just released its 10th consecutive survey on global asset owners. The asset owner survey is an important measure of global asset owner sentiment and tracks quarterly medium and long-term changes of the views held by these investors. The findings are released on a limited basis to institutional investors that participate as well as news organizations and subscribers to SWFI data services.
The survey sample includes sovereign wealth funds, pensions, superannuation funds and other institutional investors. The sample group of investors is estimated at US$ 2.326 trillion.
“Despite trade tensions, sovereign wealth funds and pensions remain committed to investing in Asia, splitting pools of capital between the various nations. Survey results show that buying high-quality equities is the most crowded trade, supplanting long U.S. technology equities,” says Michael Maduell, President of SWFI. “Geopolitical risks in the U.K., Hong Kong, China, and the Middle East are on the minds of CIOs.”
Subscribers can access the survey at SWFI.com (SWFI Global Asset Owner Terminal) under the Reports tab (then Survey tab).
| Survey Period | Believes Earnings Expectations for Listed Companies will Rise by More than 10% in the Next 12 Months | S&P 500 Earnings Actual, Quarterly Change |
|---|---|---|
| Dec 2019 | 17% | |
| Sep 2019 | 7% | -1.57% |
| Jun 2019 | 19% | -0.10% |
| Mar 2019 | 21% | 0.32% |
| Dec 2018 | 21% | 2.02% |
| Sep 2018 | 39% | 6.27% |
| Jun 2018 | 50% | 5.07% |
| Mar 2018 | 44% | 3.78% |
| Dec 2017 | 31% | 2.73% |
| Sep 2017 | 32% | 2.17% |
| Survey Period | Increasing Cash Allocation in the Next 12 Months | Increasing Active, U.S. Equities Allocation in the Next 12 Months |
|---|---|---|
| Dec 2019 | 31% | 21% |
| Sep 2019 | 38% | 13% |
| Jun 2019 | 40% | 7% |
| Mar 2019 | 17% | 13% |
| Dec 2018 | 47% | 28% |
| Sep 2018 | 41% | 16% |
The Largest Potential Risk toward Financial Market Stability
| Survey Period | Geopolitical Risk | Interest Rate Risk | Business Cycle Risk |
|---|---|---|---|
| Dec 2019 | 37% | 14% | 26% |
| Sep 2019 | 39% | 7% | 21% |
| Jun 2019 | 50% | 6% | 19% |
| Mar 2019 | 32% | 5% | 37% |
| Dec 2018 | 34% | 3% | 24% |
| Sep 2018 | 33% | 17% | 25% |
| Jun 2018 | 33% | 33% | 17% |
| Mar 2018 | 40% | 40% | 8% |
| Dec 2017 | 35% | 19% | 15% |
| Sep 2017 | 37% | 16% | 21% |
*Percentages are rounded.
Other notable points
Similar to the 4Q of 2018 survey results, at the end of 2019, more investor respondents desired to overweight Japan and Rest of Asia than underweight.
NOT SHOCKING – Asset owners continue to have a preference to overweight private infrastructure and private equity than to underweight the asset classes.
SWFI will continue to produce these surveys as well as asset owner intelligence from its offices in Seattle, Washington. For more information please reach out to support@swfinstitute.org.
About SWFI
Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund, and central bank events around the world. SWFI is a minority-owned organization.