Global public assets rise by $2.5T in 2017: report

The assets of central banks, sovereign funds and public pension funds rose by $2.5 trillion in 2017 as a result of the global economic recovery and upturn in equity markets, says a monetary policy think tank.

The Official Monetary and Financial Institutions Forum (OMFIF), a London and Singapore-based think tank and author of the Global Public Investor report, tracked the assets under management (AUM) of 750 institutions.

The rise in assets was the largest increase in five years since OMFIF started reporting. Assets increased across all types and all continents except for a $32 billion decrease in Middle East central bank holdings.

The assets of European public investors rose by $7.6 trillion or 12%, the highest year-over-year increase. Central banks, such as the Swiss National Bank, led this rise.

Assets in Asia, the second best-performing region, rose by $950 billion. The report says Asia is home to the world’s top three public investors—the People’s Bank of China, Japan’s Government Pension Investment Fund and the Bank of Japan.

In Canada, the Canadian Pension Plan Investment Board reported last week that the main fund it manages had a net annual return of 11.6% for the financial year ended March 31, and its assets increased by $39.4 billion.

Read: CPPIB reports 11.6% return, adds $39.4B in fiscal 2018

Central banks added more than 371 tonnes of gold to their reserves in 2017 and held almost 31,800 tonnes in total, the highest since the 1990s.

Future plans

Eighteen percent of public investors surveyed said they intend to increase their exposure to the renminbi in the next two years and none plan to decrease their exposure. This was the highest response for all currencies, “which illustrates the renminbi’s growth as a critical trade and investment currency,” said OMFIF in a release.

Institutions are also adjusting their investment strategies to reflect a commitment to responsible investing. Thirty-six percent of surveyed public investors said they plan to increase their green bond investments over the next two years, while 18% plan to increase their holdings of green equities.

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