Global sovereign wealth funds increasing allocations to Chinese assets: Invesco



Global sovereign wealth funds are increasing their allocations to Chinese assets, betting on the country’s prowess in digital technologies, renewable energy and advanced manufacturing to drive returns and hedge geopolitical risks, according to an Invesco study.

Nearly 60 per cent of sovereign wealth funds said they planned to increase their investments in China over the next five years, higher than in 2024, the study revealed on Monday.

The Invesco Global Sovereign Asset Management study was conducted between January and March, just before the US rolled out tariffs on its trading partners, including China. The study also coincided with global excitement over China’s home-grown, cost-effective chatbot from DeepSeek.

Interest in Chinese assets was particularly pronounced among sovereign funds in Asia-Pacific and Africa, with 88 per cent and 80 per cent, respectively, expressing intentions to increase their investments.

Around 73 per cent of North American funds, which are focused on long-term structural opportunities, showed a willingness to increase their exposure to China.

The global funds cited several factors when justifying their increased China investments. Some 71 per cent identified strong returns made in China, 63 per cent said they wanted to diversify and 45 per cent cited increased market access for foreign investors.

The most attractive sectors for investment in China were digital technology and software, advanced manufacturing and automation, and clean energy and green technology, the report said.

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