Sovereign Funds Eye Innovation and Resilience in Evolving Global Conditions

Sovereign wealth funds and central banks managing $27 trillion are shifting to active management and diversifying reserves amid a volatile global outlook, according to Invesco’s latest survey. Reuters reported that institutions with over $100 billion in assets are leading the shift to active strategies, abandoning passive approaches favored in more stable markets. Wealth funds posted a 9.4% return last year, tying their second-best result in survey history. Market volatility and de-globalisation have intensified, with long-term concerns focused on climate change and growing sovereign debt. Nearly 60% of wealth funds plan to increase investments in China over the next five years, particularly in AI, EVs, and semiconductors. Seventy percent of central banks see rising U.S. debt as a long-term risk to the dollar, yet 78% say a true rival reserve currency is still more than 20 years away.