Flight to safety complicates low yields; risk assets set to benefit

OFFICIAL institutions are fairly conservative investors. Of the US$19.5 trillion in assets managed by the 92 institutions part of this year's Global Public Investor (GPI) asset allocation analysis, more than half is in government bonds. Still, allocation to the asset class has fallen for all three GPI types.

The three types of GPIs are central banks, sovereign funds and pension funds.

Compared to last year, holdings of sovereign debt fell almost two percentage points across the sample. Motivated by a search for yield, many have boosted allocation to riskier asset classes.