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Investing September 26, 2018
Analysis Finds Shift Away from U.S. Equity in Favor of Other Asset Classes
Corporate plans have significantly increased their U.S. fixed income allocation, while public plans have used the funds from U.S. equity and placed them into alternatives, Investment Metrics finds.
Reported by Judy Faust Hartnett
Investment Metrics, a provider of investment performance analytics and reporting solutions, has discovered changes in institutional investor asset allocations over a 3.5-year period from 2014 through Q2 2018.
Across most plan types, the company has seen a shift away from U.S. equity in favor of other asset classes.
Their findings indicate that most plans have rebalanced their portfolios towards the lower end of their target allocation to U.S. equity, or, they have shifted to global equity instead, diversifying their equity risk.
Investment Metrics reports that corporate plans have aggressively incorporated a liability driven investing approach in the recent period, demonstrated by the significant increase in their U.S. fixed income allocation. Public plans have used the funds from U.S. equity and placed them into alternatives, primarily private equity, as well as non-U.S. equity.
These findings come at a time when the U.S. stock market is on the verge of completing its longest bull run in history.
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