Why pension funds are taking a more global approach to their equity mandates
We’ve noticed an evolving trend for “going global” as equity allocation decisions are reviewed.
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We have spotted an interesting trend amongst pension funds – an increase in interest in global/international equities. Why is this occurring and is it set to continue? We examine the data to help find some answers.
Sector flow data can be used to understand the direction of capital from a range of investors including pension funds. It tells us one big story – the uptick in positive net sales in global large cap equities, which is particularly striking given the consistent net outflows from regional equity mandates (see chart, below).
We believe this trend is likely to stay for some time as the larger pension plans diversify their implementation approach within equities. If your pension plan hasn’t reconsidered the role for international/global equities, now might be the time to do so.
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