“In the last year or so, I have spoken with 103 central banks on diversification,” Gary Smith, London-based global head of official institutions at BNP Paribas Investment Partners, said on Bloomberg. “If reserves are growing, so are diversification pressures. Equities are not for every bank tomorrow, but more are continuing down this path.”
Bank asset managers are seeking alternatives to government bonds as the numerous rounds of monetary easing by the Federal Reserve, Bank of Japan and Bank of England have sent yields to all-time lows. The low bond returns have signaled more than half of the central bankers surveyed to take on more risk in the equities markets.
“Equities are the last asset class standing,” Matthew Beesley said in a Bloomberg interview. “When you have dividend yields in excess of bond yields, it’s a very logical move.”
Tisha Guerrero contributed to this article.