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
-
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.
-
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.
-
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
-
Allocations remain steadyOverall asset allocation has remained steady. However, in some jurisdictions we see increased allocations to equities, with more foreign diversification and alternatives.
-
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.
-
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
Simon is Mercer’s Director of Strategic Research for AMEA and Latin America, based in Singapore. He also evaluates investment strategies as a member of Mercer’s Equity Boutique and Diversifying Alternatives Boutique. Additionally, Simon has performed advisory engagements with a range of clients across a number of investment-related issues.
Before joining Mercer in 2010, Simon was Managing Director in a Swiss-headquartered private equity firm. Prior to that, he co-founded AsiaSource Capital, a boutique investment firm based in Singapore and New York, where he managed a fund-of-hedge-funds. Earlier in his career, Simon worked in Hong Kong as a sell-side equity analyst at Cazenove, having started his career as a global equity analyst at Prudential M&G in London.
Investment solutions to suit your needs
-
Implementation and OCIOWe 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.
-
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.
-
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.
-
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.
-
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.
-
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
Previous report editions:
Before you access this page, please read and accept the terms and legal notices below.
You’re about to enter a website intended for sophisticated, institutional investors and the information contained herein is not intended for investors who are not qualified purchasers as defined in the US Investment Company Act of 1940. Information about Mercer strategies is provided for informational purposes only and does not constitute, and should not be construed as, an offer to sell, or a solicitation of an offer to buy, any securities, or an offer, invitation or solicitation of any specific products or the investment management services of Mercer, or an offer or invitation to enter into any portfolio management mandate with Mercer.
Mercer makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. Any person unable to accept these terms and conditions should not proceed any further. Mercer reserves the right to suspend or withdraw access to any page(s) included on this website without notice at any time and accepts no liability if, for any reason, these pages are unavailable at any time or for any period.