KUALA LUMPUR, June 12 (Bernama) -- Mercer has launched its report on asset allocation and investment trends, impacting pension fund assets of almost US$5 trillion in assets under management (AUM). (US$1 = RM4.16)
The report titled ‘Growth Markets Asset Allocation Trends: Evolving Landscape’ involves trends across Latin America, Middle East, Africa and Asia.
Of the AUM analysed, 56 per cent of assets were from corporate and government pension schemes in Asia.
Globally, average allocations were to fixed income (46 per cent), equities (40 per cent), alternatives (four per cent) and cash/others (10 per cent).
This positioning represents an increase in equity and a decline in fixed income over the measurement period, from 32 per cent and 57 per cent, respectively.
Mercer also noted an increase in foreign assets relative to domestic assets. This shift was notable in Japan, South Korea, Malaysia and Taiwan as investors sought greater geographic diversification.
On the other hand, Malaysia-based Employees Provident Fund (EPF) has increased its foreign equity allocation and increased efforts to diversify portfolios, including higher exposure to alternatives.
Both the EPF and government pension fund (KWAP) combined asset allocation maintains a strong bias for domestic equities and Malaysian Government fixed income securities.
Mercer Wealth Leader for Growth Markets, Fiona Dunsire said: “Investors seek to achieve better investment outcomes, but in many cases also face regulatory restrictions on the amount of assets they can invest outside their home country, all while addressing ongoing political, economic and demographic shifts.
“As investors diversify their portfolios globally, they need to assess how to access the best investment opportunities and at the right cost.”