Sovereign Funds Shift to Energy, Dollar Concerns

A survey by Invesco of 90 sovereign wealth funds and 54 central banks, managing $29 trillion in assets, reveals a major reassessment of investment portfolios. Driven by geopolitical shifts, inflation shocks, and concentrated markets, these institutions are increasingly focusing on diversification and resilience. Key findings include a pivot towards energy assets, with 80% identifying energy security and transition infrastructure as credible investments, and infrastructure reaching 9% of sovereign wealth fund assets in 2026. There are widespread and deepening concerns about the United States's long-term position as a reserve asset, with 61% of central banks citing US debt levels as a negative factor. Additionally, 29% believe the United States's reserve-currency status will weaken in five years, up from 12% in 2022. Institutions are also reviewing reliance on US-based custodians and one-third intend to boost Gold holdings.