Banker: SWFs To Go Heavy on Commodities, Emerging Markets


After 2008, when they were burned by financials, SWFs are likely to stick with a recent trend toward natural resources.


(November 5, 2009) – A senior Barclays banker is predicting that sovereign wealth funds (SWFs) will focus on commodities and emerging markets in 2010.


Gay Huey Evans, Vice Chairman for Investment Banking at Barclays, told Reuters that, following a year when the majority of the $94 billion invested by SWFs was put into commodities, he expects 2010 investments to flow to both natural resources and emerging markets. According to the banker, 61% of investments in 2009 have been put in natural resources and just 15% in financials. This is in stark opposition to 2008, when the figures were 8% and 48%, respectively.


He also noted that such investors will be more cautious going forward.


“People are going back into the market, but they are going back quietly, gently, thoughtfully, not with a bang,” Evans told Reuters. “Political pressure was certainly as strong as the real market performance in causing sovereign funds to reshape and rethink their overall investment strategy.”


One likely drawback of these actions is suspicion from the West that Asian funds are attempting to corner resource markets for their growing population. China, however, has openly stated that this is not the goal, instead citing financial return motives.

To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href=''></a>