For 25 years, UBS has hosted our flagship Reserve Management Seminar and along with that, conducted a survey on sovereign investors reserve management practices. This seminar is the longest running event in the industry and the data from the survey is among the most authoritative depictions of official reserve management activities available.
What are some of the key findings?
- The 2008-09 global financial crisis was the most impactful event over the last 25 years. The financial crisis triggered an unprecedented policy response from central banks in advanced economies.
- The second most voted development was the diversification of reserves away from governments bonds. Since equities first appeared in the RMS survey in 2003 , the number of respondents that indicated that equities are now an eligible asset class at their institution reached a record high of 39% this year.
- The introduction of the Euro was also mentioned among the top developments of the last 25 years.
- In terms of the next 25 years, the majority of survey participants thinks that the USD will remain the dominant reserve currency. According to a third of participants, the RMB is expected to become a leading reserve currency, at par with the USD and EUR today.
- About a third of respondents believe that the diversification of reserves will continue beyond listed equities and fixed income and will ultimately include certain alternative asset classes such as real estate and infrastructure.
- 62% of the respondents indicated a fiduciary duty towards the public as a key motivation for considering climate risk.
At this year Reserve Management Seminar, climate risk was top of the agenda for reserve banks.
Perspectives matter. Tune in to our insights.
Interest in RMB to rise
Here’re snapshot from the survey on questions around reserve currency allocations
1. How do survey participants expect their currency allocations to change going forward?
Indicates the % of respondents that expect their allocations for each currency to go up or down
2. Please describe your attitude towards RMB
The average long-term target allocation (not the actual allocations) to the RMB is around 4.2% among survey participants, another significant increase from 3.2% in the previous year.
5 participants reported that they introduced the RMB this year in their reserve portfolio
The number of participants that are invested, or consider investing, in the RMB decreased slightly from high levels last year
RMB’s march to reserve management status
UBS Asset Management believe the RMB's march to reserve currency status is on course and will accelerate with the gradual opening up of its domestic bond market.
Benno Klingenberg-Timm, Head of Global Sovereign Markets APAC spoke with the Sovereign Wealth Fund Institute (SWFI) on climate change and how sovereign wealth funds should invest through and beyond disruption. More
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