Two-thirds of global institutional investors plan to increase their allocations to real assets over the next two years.
Aviva Investors’ fifth annual real assets study grilled 500 investors, including pension funds, insurers, global financial institutions and official institutions, which together represented more than $3.5trn (£2.8trn) in assets.
Some 64% plan to increase their allocations to real assets over the next two years, with 46% planning to do so by up to 10%.
Although the majority cite diversification as the driver, a growing proportion since the last survey pointed to real assets’ ability to provide inflation-linked income.
Daniel McHugh, chief investment officer for real assets at Aviva Investors (pictured), said: “Inflation had an acute impact on the economic and investment landscape in 2022, making it increasingly expensive to hedge against it through traditional asset classes, while rising interest rates have eroded returns.
“The ability of real assets to provide inflation-linked income has woken investors up to the attractiveness of these strategies beyond simply being a diversification play. They are now playing a meaningful role in overall portfolios, offering investors a broad menu of options with varying degrees of risk and inflation protection built in.”
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