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Press Release

PGIM survey: Investors to continue risk-on appetite in 2025, despite geopolitical uncertaintyPGIMsurvey:Investorstocontinuerisk-onappetitein2025,despitegeopoliticaluncertainty

By PGIM Global Communications — Sep 10, 2024

3 mins

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NEWARK, N.J., Sept. 10, 2024 – A new survey from PGIM, the $1.33 trillion global asset management business of Prudential Financial, Inc. (NYSE: PRU),* finds that amid trade tensions between the U.S., Europe and China, major elections in over 70 countries this year, military conflicts, and structural changes in the global economy, more than half of top institutional investors (56%) say the threat level to their investments from geopolitical risk is their top concern. Even so, one-third plan a shift to higher-risk investments in 2025.

PGIM’s 2024 Global Risk Report: Resilient Investing Amid Geopolitical Uncertainty sets out to uncover how geopolitical risks are changing the way institutional investors are constructing their portfolios, surveying 400 institutional investors across eight countries, representing $9 trillion in assets under management. The results capture a growing sentiment that while the volatile state of geopolitics have global markets on edge, investors have grown less worried about other risks like inflation and recession fears.

OPPORTUNITY IN A TENSE GEOPOLITICAL ENVIRONMENT

Among possible geopolitical flashpoints, investors say they are monitoring the Taiwan Strait and South China Sea, with nearly half (48%) of investors identifying it as the risk most likely to impact global markets in the next 24 months, given its ties to asset prices. Just over a quarter (27%) said military conflict in the Middle East is the greatest risk.

However, despite a heightened sense of geopolitical risk, investors say they are ready to take on risk in their portfolios — a sign that institutions are taking a long-term view and looking at volatility as an opportunity. One-third of institutional investors in the survey said they plan to have an aggressive portfolio strategy (i.e., taking on more risk) by the end of 2025, compared with about one-quarter who are currently aggressive in their risk tolerance.

INVESTORS CAUTIOUS AROUND ELECTIONS, BUT DON’T EXPECT SURPRISES

More than half of investors globally (56%) say that the outcome of this year’s elections are a factor in their portfolio decisions.

While 29% of investors globally have held more cash in response to geopolitical uncertainty, this “flight to safety” was most pronounced in the U.S., where 41% of investors said they have moved into cash to manage risk. A majority of investors globally (55%) said they plan to increase cash allocations heading into elections.

About three-quarters of institutional investors also said their portfolios are moderately or well prepared for any repercussions stemming from major elections in 2024, reflecting confidence that policy outcomes in the U.S. and elsewhere will not come as a surprise. At least two-thirds said the same when polled about the investment impacts of trade subsidies and disputes, global debt levels, regulatory policies, and supply-chain disruptions.

INVESTMENT STRATEGIES FOR AN UNPREDICTABLE WORLD

Nearly half of the survey’s respondents (48%) feel there are now too many geopolitical risks to effectively mitigate their potential impact to portfolios. What can investors do when the fallout from geopolitical events is less certain?

The report details several approaches investors are using to manage geopolitical risk and identify investment opportunities — such as data centers and alternative energy — that are emerging as a result of geopolitical shifts.

A comprehensive approach to diversification and liquidity could mitigate risk by helping investors avoid becoming a forced seller during unexpected events. Quantitative models could make it possible to keep investors ahead of the curve as trends begin to change. Some solutions, such as buffered ETFs, could help mitigate downside risk while maintaining some exposure to the upside. Other options include increasing allocations to real assets, stress-testing portfolios with scenario analysis, and utilizing active strategies.

For more, read PGIM’s 2024 Global Risk Report: Resilient Investing Amid Geopolitical Uncertainty at pgim.com/geopolitical-risk. 

ABOUT PGIM

PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU). In 41 offices across 18 countries, our more than 1,400 investment professionals serve both retail and institutional clients around the world.

As a leading global asset manager with $1.33 trillion in assets under management,* PGIM is built on a foundation of strength, stability, and disciplined risk management. Our multi-affiliate model allows us to deliver specialized expertise across key asset classes with a focused investment approach. This gives our clients a diversified suite of investment strategies and solutions with global depth and scale across public and private asset classes, including fixed income, equities, real estate, private credit, and other alternatives. For more information, visit pgim.com.

Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com.

* As of June 30, 2024

Media Contact

Alyssa McMahon

+1 973-204-5808

alyssa.mcmahon@pgim.com

Read the report
2024 Global Risk Report

Read PGIM’s Global Risk Report to learn more about investment strategies for an unpredictable world.

Read the report

  • By PGIM Global Communications

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For Professional Investors only.* All investments involve risk, including the possible loss of capital.

This material is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. PGIM is the principal asset management business of Prudential Financial, Inc. and a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training.

The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary.    

In the United Kingdom, this website may be issued by PGIM Private Alternatives (UK) Limited or PGIM Private Capital Limited.  In the European Economic Area (“EEA”), this website may be issued by PGIM Private Capital (Ireland) Limited or PGIM Luxembourg S.A. or PGIM Real Estate Germany AG.

PGIM, Inc. has its headquarters at 655 Broad Street, Newark, NJ 07102. PGIM Private Capital (Ireland) Limited has its registered office at IDA Business Park, Letterkenny, Co. Donegal, F92 FP83, Ireland. PGIM Private Capital (Ireland) Limited is authorised and regulated by the Central Bank of Ireland and registered in Ireland under company number 635793 operating on the basis of a European passport. PGIM Limited and PGIM Private Alternatives (UK) Limited have their registered offices at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number: 193418). PGIM Private Alternatives (UK) Limited is authorised and regulated by the FCA of the United Kingdom (Firm Reference Number: 181389). PGIM Private Capital Limited has its registered address at 1 London Bridge, London SE1 9BG and is authorised and regulated by the FCA of the United Kingdom (Firm Reference Number: 172071). PGIM Luxembourg S.A., Netherlands Branch is registered with the Netherlands Chamber of Commerce under number 85998877 and has its local offices at Gustav Mahlerlaan 1212, 1088LA Amsterdam, The Netherlands. PGIM Luxembourg S.A. has its registered address at 2 Boulevard de la Foire, L-1528 Luxembourg and is authorised and regulated by the Commission de Surveillance du Secteur Financier (“CSSF”) in Luxembourg (registration number A00001218). PGIM Real Estate Germany AG has its registered address at Wittelsbacher Platz 1, 80333 Munchen, Germany and is authorised and regulated by Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) in Germany (registration number 10138142).

In Japan, information is provided by PGIM Japan Co., Ltd. (“PGIM Japan”) and/or PGIM Real Estate (Japan) Ltd. (“PGIMREJ”).  PGIM Japan, a registered Financial Instruments Business Operator with the Financial Services Agency of Japan offers various investment management services in Japan.  PGIMREJ is a Japanese real estate asset manager that is registered with the Kanto Local Finance Bureau of Japan.

In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 of the Securities and Futures Ordinance (Cap. 571). In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a regulated entity with the Monetary Authority of Singapore under a Capital Markets Services License to conduct fund management and an exempt financial adviser. This material is issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act 2001 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Section 305 of the SFA. In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors on a cross-border basis.   

Prudential Financial, Inc. (“PFI”) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. 

*PGIM.com/Podcasts and its content is intended for informational or educational purposes only and is not directed exclusively to Professional Investors. 

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