Pension asset allocation insights 2022
Asset allocation is one of the most important decisions an investor makes
Three asset allocation themes for investors to consider
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Changing of the guardUnderstanding the effects of the changing fortunes of economic players and ways of thinking that have held sway for a long time, including the evolving objectives of monetary policies; the prospect of an “Asian century” and the dramatic re-shaping of how finance is provided.
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Position for transitionHow investors should plan for the changes required to put us on a more sustainable path; the role of impact investing; the management of resources to facilitate the green transition; and the power that can be exercised through engagement.
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Modern diversificationHow portfolios should be reinvented to hit target returns while maintaining protection; the use of dynamic asset allocation between strategies and themes; and how to gain access to emergent innovators.
Pension asset allocation trends in Asia, Middle East, Africa and Latin America
Key asset allocation trends in 2022
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Allocations remain steadyOverall asset allocation has remained steady. However, in some jurisdictions we see increased allocations to equities, with more foreign diversification and alternatives.
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Mounting interest in sustainable investingSustainable investing is demanding the attention of many investors and regulators, with a wide range of initiatives across different markets working towards greater integration of environmental, social and governance factors in investment programmes.
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Investors are responding to inflation and other market pressuresMonetary policies are being reshaped as inflation balloons past central bank targets, and policymakers are grappling with the consequences of bloated balance sheets, the potential economic impact of higher interest rates and disrupted global supply chains.
Five actions investors should consider for asset allocation
Overall allocation observations
fixed income,
compared to 50.6% the prior year
equities,
compared to 36.1% the prior year
alternatives,
compared to 4.3% the prior year
cash,
the same as the prior year
other,
compared to 4.9% the prior year
Investment solutions to suit your needs
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Implementation and Investment SolutionsWe can help you define, develop and implement your investment strategy by addressing areas such as governance, risk, sustainability and diversification. We flex our services to suit your needs and help you achieve your investment goals.
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Sustainable investmentsWe help you build a sustainable investment strategy that integrates environmental, social and governance (ESG) considerations; diversity, equity and inclusion (DEI) factors and seeks an optimal mix between positive change and favourable returns.
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Alternative investmentsLeveraging our existing relationships with hundreds of asset managers around the world, we can help you identify and source new investment strategies, opportunities, ideas and innovations across private markets and hedge funds.
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Strategic researchBecome a member of the MercerInsight® Community today to get access to strategic research from hundreds of thought leaders around the world, including Mercer and third-party publishers. It’s complimentary and easy to join.
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Asset manager researchBy subscribing to MercerInsight®, an alliance with eVestment, you can gain access to data, analytics and our forward-looking research on asset managers and thousands of investment strategies across both public and private markets.
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Managing investment riskOur Mercer Sentinel team can help you conduct due diligence and mitigate operational risks across your portfolios and strategies. We assess asset managers, custodians and other service providers to help you deliver on your governance objectives.
Contact our specialists to see how we can help you with your asset allocation and portfolio strategy
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