Central banks, Sovereign wealth funds 24th Annual Reserve Management Survey

How have the most sophisticated investors change their currency allocations? Find out from UBS-AM Annual Reserve Management Survey.

06 Nov 2018

For more than 20 years, we have asked central banks and sovereign wealth funds (SWFs) around the world about their views on macro-economic and asset allocation matters. This Annual Reserve Management Survey is now a hallmark piece from us.

In the 24th Annual Reserve Management Survey carried out in 2018, the responses indicated that the most sophisticated investors are :

  1. Diversifying their FX reserves; majority of the central banks are interested to increase allocations to non-government bond assets;
  2. Increasing their holdings of corporate debt and mortgage- and asset-backed securities; and
  3. Putting more of their reserves in Renminbi and Euro but the US Dollar remains the default currency to invest new reserves

Currency allocations

Changes among sovereign investors in the last 12 months

Source: UBS Asset Reserve Management Survey, results as at June 2018

What else did the survey reveal?

The Business Times in Singapore featured the key highlights of the survey with additional insights on how central banks and SWFs are looking at China:

… the use of RMB will likely rise towards a level of 10 per cent of global reserves in a decade’s time.

… it’s not a question of whether the RMB will become an important currency, but more a question of when

Massimiliano Castelli, Head of Global Strategy, Global Sovereign Markets

Sovereign wealth funds have been investing in Asia and emerging markets (EM) since 10 to 15 years ago, and China was always a part of an EM investment, but today you probably should look at it as a standalone part of your asset allocation.

Benno Klingenberg, Head of Asia- Pacific,
Global Sovereign Markets

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