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Pension allocation insights covering US$5.2 trillion in assets under management from government, corporate, and mandatory pension plans in Latin America, the Middle East, Africa and Asia. We cover Indian pensions for the first time in the 2020 edition.
Heightened market volatility in 2020, amid the significant health challenges of the coronavirus pandemic, underscores the importance of investors’ long-term asset allocation strategy. Now is not the time for knee-jerk reactions; however, it is a good time to review your risks in light of your objectives and see how your asset allocation compares to those objectives and to others around the world.
Asset allocation is one of the most important decision an investor makes, and thorough assessment of risks is critical to constructing a portfolio that will seek to meet your objectives and attempt to manage the risks that are important to you. While it is not the time for knee-jerk reactions, it is a good time to review your risks in light of your objectives and your asset allocation. This year’s “allocation insights 2020" report helps you do exactly that.
Our new report provides investors with an understanding of investment allocations within retirement plans in “growth markets” regions – which includes countries in Latin America, the Middle East, Africa and Asia.
This region continues to be a critical part of the global economy, with 75% of the global population in these markets and close to 80% of global growth comes from these economies. Some of the largest asset owners in the world are based there, and investment portfolios are rapidly evolving.
Investors in these geographies face many critical challenges: pressure to achieve higher returns, minimize costs, and implement better governance. In many cases, investors also face regulatory restrictions on foreign investing. At a time of immense economic uncertainty and heightened global risks, it is more important than ever to consider your asset allocation decisions, so we encourage you to consider our survey findings with your own portfolio in mind.
Asset allocation was relatively stable over the past year , but that’s not unusual as allocation changes tend to move gradually along long term trend. There are a few things that investors should be aware of that we are seeing over the six-year time horizon that the survey covers. The report provides allocation details overall, per zone and by individual countries. Download the report today for a deep dive into your region.
Equities now represent a larger percentage of aggregate assets
Alternatives increased as part of investors’ portfolios and are becoming more of a focus. Investors access alternatives primarily through property, infrastructure and private equity.
Allocations to foreign assets continued to rise, although significant home biases remain
Investors are shifting focus to broad market trends such as sustainability/ESG, governance and fees, although the response to and application of these trends vary widely by market.
The annual report, now in its second year, incorporates input from 16 markets, including two new countries for 2020: India and Turkey. We look at allocations to fixed income, equities, alternatives and cash We provide anecdotes and commentary on markets where external data is unavailable, including the Gulf Cooperation Council (GCC) region, China, the Philippines and Singapore. We have also split the results by pension plan type and sponsor to provide a much deeper view of the allocation.
For more information, please contact your local Mercer representative or one of the contacts below
Fiona Dunsire
Investments and Retirement Leader, Growth Markets
Tracy Teel
Strategy Leader, Growth Markets, Investments and Retirement
Simon Coxeter
Growth Markets, Investments Strategic Research Director
Please see Important Notices for further information.
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