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Since the onset of COVID-19, investment market returns have experienced periods of short-term market volatility. While asset owners need to grapple with short term market risks and volatility, Mercer is of the view that investors should also focus on longer term trends affecting the long term returns of the portfolios.
Do investors spend enough time thinking about the risks and opportunities associated with long-term systemic trends such as climate change, geopolitics and demographic shifts in their portfolios? How can asset owners incorporate these trends into their organization’s vision, governance and implementation processes? What are tools that they can use to mitigate risks associated with these trends?
Mercer partnered the World Economic Forum for two years to research these questions and to uncover how asset owners address six seismic shifts:
Through more than 200 meetings with members of the investment community and an asset owner survey representing over US$3.4 trillion in aggregated assets, we have insights on the actions advanced investors are taking to address these global systemic trends in their investment programs.
These six trends affect all asset owners, whether the investor is a sovereign wealth fund or a pension fund. Asian investors that we interviewed rank climate change and low and negative interest rates as most relevant to their investment programs.
To integrate these long-term systemic trends into their portfolio, stakeholder buy-in on investment beliefs and vision, and how that translates into strategic investment decisions is key.
Mercer is here to help investors set their visions and establish policies, procedures and implementation processes that can transform their organizations and future-proof their investment portfolios.
Contact us today to advance your investment solutions. Find out how we can help you develop strategies to counter risks associated with climate change and low/negative interest rates.