Jun 27, 2017

Sovereign wealth funds have an investment return gap

Invesco recently conducted an asset management study of sovereign wealth funds, and found a massive gap between target returns (6.1%) and actual returns for last year (4.1%), as a percentage of assets under management. The sample excluded central banks, and the averages were not weighted by AUM.

  • What it means: Expect SWFs to keep pushing deeper and deeper into alternatives, in an effort to shrink that gap – particularly as economic volatility causes some governments to tap sovereign reserves.
  • Catch-22: Massive inflows into alternatives also can depress long-term returns, thus making it harder for SWFs to meet their targets.
  • Context: "Norway's sovereign wealth fund has grown so large that it is two-and-a-half times the size of the Norwegian economy. Its size is equivalent to $185,000 for each man, woman, and child in Norway." -- ValueWalk

Go deeper

Warren sees bump in national poll following Nevada debate

Photo by David Becker/Getty Images.

Sen. Elizabeth Warren surged to 19% and second place in a CBS News/YouGov national poll released Sunday, trailing front-runner Sen. Bernie Sanders (28%) but edging out Joe Biden (17%) and Michael Bloomberg (13%).

Why it matters: The poll notes that only 42% of Democratic primary voters have made up their minds. While Warren underperformed in the first three states, her strong debate performance in Nevada last week may have given her campaign new life.

Pence aide says intel report of Russia helping Trump is "false information"

Marc Short. Screenshot: Fox News

Marc Short, chief of staff to Vice President Mike Pence, claimed on "Fox News Sunday" that the White House has not received intelligence that Russia is seeking to help President Trump win re-election, calling it "false information" that has been selectively leaked by Democrats on the House Intelligence Committee.

The big picture: Short and national security adviser Robert O'Brien both dismissed reports published in the Washington Post and New York Times last week about a briefing provided by top election security official Shelby Pierson, an aide to outgoing acting director of national intelligence Joseph Maguire.

Bernie's juggernaut

Sen. Bernie Sanders speaks in San Antonio last night with his wife, Jane. Photo: Eric Gay/AP

Sen. Bernie Sanders won so big in the Nevada caucuses that Democrats are hard-pressed to sketch a way he's not their nominee.

Driving the news: With 60% of precincts counted (slow, but better than Iowa!), Sanders is running away with 46% of delegates — crushing Joe Biden's 20%, Pete Buttigieg's 15%, Sen. Elizabeth Warren's 10% and Sen. Amy Klobuchar's 5%.