Investing amid shifting tides
Every year, OMFIF’s Global Public Investor captures a moment in the evolution of official investment, with some years defined by a single shock and others by a turning point in markets. This year’s report is different because it points to something more durable: a world in which volatility is no longer a phase to get through, but a condition to be managed.
The title of this year’s report, ‘Riding the wave’, reflects that shift. Public investors are not standing still, but neither are they making reckless moves. Instead, they are adjusting cautiously, testing new tools, diversifying where possible and holding on to the principles that have always defined official investment on safety, liquidity and long-term value.
In total, GPI draws on insights from a survey of 90 central banks, public pension funds and sovereign funds with over $10tn in assets under management.
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Key findings:
- For the first time since the GPI series began recording reserve managers’ long-term intentions in 2023, more central banks plan to decrease their dollar holdings than increase over the next 10 years.
- A net 30% plan to increase their gold allocation over the next one to two years, while 61% expect the price to settle between $5,000 and $6,000 per ounce by June 2027. Only 28% say the current price is discouraging further purchases.
- The motivation behind gold purchases is increasingly strategic rather than purely financial. Protection against geopolitical risk is cited by 51% of respondents, up 11% from 2024.
- 29% of respondents indicated a desire to increase euro holdings in the long term, up from 22% last year.
- 55% of central banks for whom the question applies would increase their holdings of euro-denominated reserve assets if the European Union were to become a permanent issuer.
- 89% of developed economy central banks report some form of artificial intelligence implementation, compared with 44% of emerging market peers.
- For public funds, the US and China are the most attractive developed and emerging markets, driven by leadership in AI.
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