Latest news with #RodRingrow
Business Times
2 days ago
- Business
- Business Times
Sovereign wealth funds fear missing China tech boom: survey
[LONDON] Global sovereign wealth investors managing US$27 trillion in assets are increasingly bullish on China's tech sector because they don't want to miss out on the next waves of innovation, according to an annual survey by Invesco Asset Management. Some 59 per cent of respondents see China as a high or a moderate allocation priority over the next five years, up from 44 per cent last year, the survey conducted among 83 sovereign wealth funds and 58 central banks during the first quarter of 2025 showed. 'There's a bit of fear-of-missing-out effect here with China tech boom like Silicon Valley of some years ago,' said Rod Ringrow, head of official institutions at Invesco. 'There's a general view from the sovereign sector here that Chinese tech will be globally competitive and they want to make sure they're part of the programme now.' Attractive local returns are cited as the top driver for future flows, reflecting confidence in the sector's valuations and earnings potential relative to other markets, the survey said. The shift comes despite rising tensions between China and the US. It comes at the cost of reduced allocations to longer-maturity US government debt amid concerns about fiscal sustainability and policy volatility, the report said. Sovereign asset managers are also re-evaluating passive index strategies, particularly those focused on exposure to US equities. Furthermore, central banks are building larger, more diversified reserves to withstand volatility, the report said. While the US dollar retains its dominance, gold's role as a defensive asset is growing. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Central banks continue to buy gold and a lot of that is driven by weaponisation concerns,' Ringrow said. 'It's a core part of the reserve holdings due to anti-inflation protection but also because it can't be easily sequestered by someone else.' Sector-focused Ringrow said the bullish camp on China includes a number of US-based institutions. Still, the renewed interest doesn't mean a return to a broad-based 'rush to China' sentiment of the past, according to Invesco. Instead, it 'reflects a more deliberate, sector-focused approach, targeting areas where China is positioned to achieve global leadership, underpinned by both market momentum and strategic policy support,' the report said. This means that sovereign investors are orienting their China strategies around specific tech ecosystems, rather than broad macroeconomic exposure. These include semiconductors, cloud computing, artificial intelligence (AI), electric vehicles and renewable energy infrastructure, according to the report. Invesco cited a Middle Eastern sovereign wealth fund as saying that China will dominate solar, wind, EV, and battery markets for decades. A respondent from the Asia-Pacific region said that given the amount of resources and policy support from Chinese authorities, it's only a matter of time until the country closes the gap on the US in semiconductors, cloud computing, and AI. BLOOMBERG
Zawya
2 days ago
- Business
- Zawya
Wealth funds warm to active management - and China - to weather volatility, report shows
LONDON: The world's sovereign wealth funds are turning to active fund management and investments in China, while central banks are diversifying reserves to weather a volatile global environment, an Invesco survey of sovereign funds and central banks managing $27 trillion in assets showed. Still, the dollar reigns supreme, with the bulk of central banks saying it would take two decades to dethrone it - if ever - as the top reserve currency despite growing concerns. "Institutions with greater than $100 billion - so the pretty large institutions - those are the ones that were most interested in moving more to active management," said Rod Ringrow, Invesco's head of official institutions. Whereas funds liked passive management in predictable market conditions, predictable was "no longer the case," he added. "I think that frames the whole approach... in this move to active management." On average, wealth funds made returns of 9.4% last year, the joint second-best performance in the survey's history. Nevertheless, market volatility and de-globalisation concerns have spiked - and over the 10-year horizon, big worries centre around climate change and rising sovereign debt levels. Over 70% of the 58 central banks polled said rising U.S. debt is negatively impacting the dollar's long-term outlook. Two thirds said they are looking to build larger, more diversified reserves to manage volatility. Nevertheless, 78% think it will take more than two decades for a credible alternative to the greenback to emerge. That is a jump from 58% last year while just 11% of central banks now view the euro as gaining ground compared to 20% last year. CHINA FOMO The survey was carried out between January and March - before U.S. President Donald Trump's "Liberation Day" tariff announcements and at the peak of excitement around DeepSeek AI's emergence in China. Wealth funds are seeing a major resurgence in interest in Chinese assets with nearly 60% intending to increase allocations there in the coming five years, specifically the tech sector. That number jumps to 73% in North America despite the worsening U.S.-Sino tensions, whereas in Europe it sits at just 13%. Wealth funds, the survey said, were now approaching China's innovation-driven sectors with the "strategic urgency they once directed toward Silicon Valley." "There's a little bit of a FOMO," Ringrow explained, a view that "I need to be in China now" as it shapes up to be a global leader in semiconductors, cloud computing, artificial intelligence, electric vehicles and renewable energy. Private credit has also emerged as a key focus for funds seeking alternative sources of income and resilience. It is now adopted by 73% of wealth funds, up from 65% last year, and with half actively increasing allocations. "This represents one of the most decisive trends in sovereign asset allocation," the report said. There is also growing interest, especially among emerging market wealth funds, in stablecoins - a type of cryptocurrency that is most commonly pegged 1:1 to the dollar. Almost half of funds said stablecoins were the type of digital assets they were inclined to invest in, although that was still behind the likes of bitcoin, where the share was 75%.
Business Times
2 days ago
- Business
- Business Times
Sovereign wealth funds fear missing China tech boom, survey says
[LONDON] Global sovereign wealth investors managing US$27 trillion in assets are increasingly bullish on China's tech sector because they don't want to miss out on the next waves of innovation, according to an annual survey by Invesco Asset Management. Some 59 per cent of respondents see China as a high or a moderate allocation priority over the next five years, up from 44 per cent last year, the survey conducted among 83 sovereign wealth funds and 58 central banks during the first quarter of 2025 showed. 'There's a bit of fear-of-missing-out effect here with China tech boom like Silicon Valley of some years ago,' said Rod Ringrow, head of official institutions at Invesco. 'There's a general view from the sovereign sector here that Chinese tech will be globally competitive and they want to make sure they're part of the programme now.' Attractive local returns are cited as the top driver for future flows, reflecting confidence in the sector's valuations and earnings potential relative to other markets, the survey said. The shift comes despite rising tensions between China and the US. It comes at the cost of reduced allocations to longer-maturity US government debt amid concerns about fiscal sustainability and policy volatility, the report said. Sovereign asset managers are also re-evaluating passive index strategies, particularly those focused on exposure to US equities. Furthermore, central banks are building larger, more diversified reserves to withstand volatility, the report said. While the US dollar retains its dominance, gold's role as a defensive asset is growing. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Central banks continue to buy gold and a lot of that is driven by weaponization concerns,' Ringrow said. 'It's a core part of the reserve holdings due to anti-inflation protection but also because it can't be easily sequestered by someone else.' Sector-focused Ringrow said the bullish camp on China includes a number of US-based institutions. Still, the renewed interest doesn't mean a return to a broad-based 'rush to China' sentiment of the past, according to Invesco. Instead, it 'reflects a more deliberate, sector-focused approach, targeting areas where China is positioned to achieve global leadership, underpinned by both market momentum and strategic policy support,' the report said. This means that sovereign investors are orienting their China strategies around specific tech ecosystems, rather than broad macroeconomic exposure. These include semiconductors, cloud computing, artificial intelligence, electric vehicles and renewable energy infrastructure, according to the report. Invesco cited a Middle Eastern sovereign wealth fund as saying that China will dominate solar, wind, EV, and battery markets for decades. A respondent from the Asia-Pacific region said that given the amount of resources and policy support from Chinese authorities, it's only a matter of time until the country closes the gap on the US in semiconductors, cloud computing, and AI. BLOOMBERG
Business Times
3 days ago
- Business
- Business Times
Wealth funds warm to active management – and China – to weather volatility: report
[LONDON] The world's sovereign wealth funds are turning to active fund management and investments in China, while central banks are diversifying reserves to weather a volatile global environment, an Invesco survey of sovereign funds and central banks managing US$27 trillion in assets showed. Still, the US dollar reigns supreme, with the bulk of central banks saying it would take two decades to dethrone it, if ever, as the top reserve currency despite growing concerns. 'Institutions with greater than US$100 billion, so the pretty large institutions, those are the ones that were most interested in moving more to active management,' said Rod Ringrow, Invesco's head of official institutions. Whereas funds liked passive management in predictable market conditions, predictable was 'no longer the case', he added. 'I think that frames the whole approach... in this move to active management'. On average, wealth funds made returns of 9.4 per cent last year, the joint second-best performance in the survey's history. Nevertheless, market volatility and de-globalisation concerns have spiked, and over the 10-year horizon, big worries centre around climate change and rising sovereign debt levels. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Over 70 per cent of the 58 central banks polled, for example, now believe rising US debt is negatively impacting the US dollar's long-term outlook. Nevertheless, 78 per cent think it will take more than two decades for a credible alternative to the greenback to emerge. That is a jump from 58 per cent last year while just 11 per cent of central banks now view the euro as gaining ground compared to 20 per cent last year. China Fomo The survey was carried out between January and March, before US President Donald Trump's 'Liberation Day' tariff announcements and at the peak of excitement around DeepSeek AI's emergence in China. Wealth funds are seeing a major resurgence in interest in Chinese assets with nearly 60 per cent intending to increase allocations there in the coming five years, specifically the tech sector. That number jumps to 73 per cent in North America despite the worsening US-Sino tensions, whereas in Europe it sits at just 13 per cent. Wealth funds, the survey said, were now approaching China's innovation-driven sectors with the 'strategic urgency they once directed towards Silicon Valley'. 'There's a little bit of a Fomo,' Ringrow explained, a view that 'I need to be in China now' as it shapes up to be a global leader in semiconductors, cloud computing, artificial intelligence, electric vehicles and renewable energy. Private credit has also emerged as a key focus for funds seeking alternative sources of income and resilience. It is now adopted by 73 per cent of wealth funds, up from 65 per cent last year, and with half actively increasing allocations. 'This represents one of the most decisive trends in sovereign asset allocation,' the report said. There is also growing interest, especially among emerging market wealth funds, in stablecoins – a type of cryptocurrency that is most commonly pegged 1:1 to the US dollar. Almost half of the funds said that stablecoins were the type of digital assets they were inclined to invest in, although that was still behind the likes of bitcoin, where the share was 75 per cent. REUTERS
