Lucas Cacioli

The environmental impact of investment portfolios dominated headlines in 2021, but institutions will only increase their risk if they fail to address the social and governance principles of ESG as well, according to New Zealand’s sovereign wealth fund.

Volatile geopolitics, unpredictable monetary policy and generational differences in priorities means sovereign wealth funds will have their work cut out for them in the coming decades.

For asset owners and managers, sustainable long-term investing has evolved from divestment to active ownership strategies that foster better business practices.

Geopolitical turmoil and surging inflation might be looming over the global economy, but institutional investors continue to search for value in the potentially overheated private markets.

While the Canadian pension fund sees great opportunity throughout Asia’s emerging markets, it currently views India as the most investable and viable from an infrastructure investment perspective.

ETFs tracking technology themes received the largest share of fund flows over 2021, as China takes third place in thematic fund market size behind Europe and the US.

Alternative data can be a source of outperformance for quantitatively orientated institutional investors looking to generate alpha and mitigate risk as investment strategies on traditional data sets becomes oversaturated.

Measuring the environmental impact of investments is difficult, and measuring the social impact is harder still. However, this hasn’t stopped asset owners and managers from searching for better measurement techniques.

Investors appear to have reset their short-term expectations and risk tolerance across asset classes due to higher-than-expected inflation, the rise of interest rates, and the war in Ukraine.

While Invesco asset management sought to unify its multiple systems to better serve its clients, asset owner APG evolved its own system to grow its portfolio for its Dutch pension members.

Asian investors are ramping up climate strategy integration, a trend that NZ Super views as critical to long-term risk and returns.

Supply chain shocks, rising inflation, and the ongoing Russian assault on Ukraine prompt investors to prepare for an economic environment of stagflation.