Capital Ideas: Institutional Investor and SWF activity During the Pandemic: Reasons for Optimism?

by Garima Gupta & Mary Menzemer

State Street Corporation and IFSWF have released their research findings on how sovereign wealth funds and institutional investors performed in their asset allocation through the COVID 19 pandemic. One of the interesting indicators used in this report is State Street’s Behavioral Risk Scorecard, an aggregate measure of risk appetite derived from the capital flows and holdings by institutional investors across multiple asset classes and factors.

Through this research, State Street and IFSWF are strengthening the notion that SWFs are large institutional investors that deploy capital based on professional best practices centered on risk profile. Their investment decisions during the COVID 19 pandemic have been stabilizing. The SWFs findings relating to resilience and adaptability during this economic contraction are aligned with our conclusion discussed in A Year of “Living Dangerously”: The COVID Pandemic and Sovereign Wealth Funds Direct Investments 2019-2020.

The full report by State Street and IFSWF can be accessed here.