1. 资源名称：Merrill Lynch Sovereign Wealth Funds Report
2. 作者：Merrill Lynch
3. 资源类别：研究报告
4. 资源大小、格式、页数：389kB .pdf 26 pages
Oct. 5, 2007
by Merrill Lynch
26 pages
Executive summary
Central banks currently control over US$5.6tn in reserves, with Asia and oilproducers
in the forefront. Reserves are still growing at a rate of nearly US$1tn a
year, centered on China, Russia and the Middle East.
The tap feeding these reserves is still running at full pressure, as the US current
account deficit remains huge and is financed largely by official inflows. However,
we think the tap is slowly being turned off. The US current account deficit is set to
narrow but, most importantly, global savings are increasingly likely to be
channeled to alternative uses. Regionally, this process could be more acute in the
Middle East, where population dynamics are most strongly in play. Even so, an
additional US$2.7tn of reserves should accumulate over the next five years.
The bathtub is now overflowing. We outline two scenarios on the future size of
SWFs: assuming reserves are reduced closer to the desired level, SWFs should
swell by US$1.2tn a year to US$7.9tn by 2011. If, however, we assume that
central bank reserves remain flat, the figures would be US$0.7tn and US$5tn.
We study one early adopter, Norway, and conclude that SWFs are likely to invest
the bulk of their assets via external managers, and target a shift in asset
allocation in favor of riskier assets. We also look at a newcomer, China, and
conclude that it is likely to be more passive than we might have thought.
We examine the risk of protectionism in the US and Europe and the likely
response of China. We are not hugely concerned, as SWFs should find other
ways of addressing this, including leveraging foreign access to their own markets.
Under reasonable assumptions, we conclude that the share of SWFs globally in
riskier markets should double or triple over the next five years, with a cumulative
US$3.1-US$6tn invested. This compares to a current market capitalization of
US$24.2tn for equities and US$13.4tn for non-sovereign debt. Inflows into safer
assets initially continue but later could reverse.
We compare the fate of the US dollar to that of gold following the breakdown in
the gold standard, and conclude that a net of US$620-US$1,200bn USD holdings
will be reallocated over the next half decade into other currencies.
Our report concludes with strategy recommendations on pages 22-25. Near term,
inflows into safer assets should continue, with the Middle East dominating inflows
into riskier assets. Over the medium term, however, we expect the center of
gravity to move to Asia and Russia. We expect riskier assets – particularly
outside the US – to be supported relative to safer assets, although it is not clear
that prices of riskier asset would rise. The diversification story depends to a large
extent on how “risky” these “riskier” assets are. Bond yields could face upward
pressure as curves steepen, particularly in the US. This rebalance in equity
versus bond valuation removes one of the pillars of support for private equity.
A surge in global asset supply should intensify as markets deepen and greater
capital mobility is encouraged. This also represents incremental revenue for the
global asset management industry from a sizeable new client type.
Putting everything together, we are optimistic: investors should rejoice in the
more balanced global economy to which these tectonic shifts contribute. Enjoy
the bubble bath!
Alex Patelis
Head of International Economics
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