LONDON: A rotation by sovereign wealth funds and other institutional investors to add risk since the COVID-19 pandemic, moving from cash and bonds to stocks, may have further to run as many still have large cash positions, according to research published Thursday.
Investors had a more positive outlook for 2021, having reached a risk-neutral level across asset classes after starting last year with the highest cash levels since the 2009 financial crisis, the research from State Street Corporation and the International Forum of Sovereign Wealth Funds (IFSWF) found.
Many are also adding to their exposure within private markets, with a particular focus on infrastructure and real estate, hastened by low real returns in public markets, according to the findings, based on State Street data and an IFSWF survey of seven of its largest sovereign fund members.