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Invesco study: Sovereign investors prefer US over post-Brexit UK

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Invesco study: Sovereign investors prefer US over post-Brexit UK

Sovereign wealth asset managers perceive a more business-friendly climate in the U.S. in the wake of the election of President Donald Trump, while the U.K.'s decision to leave the European Union has made the country less attractive to those investors, according to the latest global sovereign asset management study from Invesco.

The company interviewed 97 individual sovereign investors and central bank reserve managers representing about $12 trillion in assets in face-to-face interviews to conduct the study.

Low interest rates are the greatest tactical asset allocation factor, respondents said. But sovereign investors expect Brexit and the U.S. election results to increasingly determine future allocations.

The U.S. continues to be the most attractive market, ranked No. 1 for the past three years. The study said the market confidence of a "pro-business" corporate tax regime under Trump and interest rate rises were attracting investors to the U.S.

But Brexit has fueled negative sentiment about the U.K., the report found, with many investors questioning the future of the country as an "investment hub" for Europe.

Germany was perceived as a "safe haven," with sovereign investor allocations rising to 7.8% from 7% last year for the country. The study also found that sovereign investors were looking to global real estate to get better returns.