Geopolitical risks see institutional investors rush to stockpile cash, survey finds

Global institutional investors and wealth managers are stockpiling cash at the fastest pace on record while quietly retreating from US and UK equities as persistent inflation and mounting geopolitical risks dominate portfolio decisions, according to a report by Marsh Investments.

The institutional investment consultancy polled 430 asset owners managing a combined US$5.76 trillion and found that 37.8 per cent planned to increase cash allocations over the next 12 months, up from just 9 per cent in a similar survey last year.

Net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent – the sharpest year-on-year swing of any asset class in the survey.

United States and United Kingdom equities were the only two asset classes where more investors planned to cut exposure than add, with net allocation intentions falling to negative 10.3 per cent and negative 16.5 per cent, respectively.