Global Markets Daily Tracking Rising Equity Allocations for Asset Owners

Economics Research 23 July 2026 | 10:53AM BST

Global Markets Daily: Tracking Rising Equity Allocations for Asset Owners

n Strong equity returns since the GFC, and especially over the past 3–4 years, have Christian Mueller-Glissmann, CFA pushed global financial assets and market-cap weighted benchmarks materially | christian.mueller- towards equities, particularly technology. This passive drift is also influencing Goldman Sachs International

investor asset allocations. Alessandro Giglio | n Using a database of G10 household, pension and insurance allocations, we show Goldman Sachs International that equity allocations are at or near record highs. In the US, household equity Andrea Ferrario | holdings have overtaken real estate as a share of net financial wealth; although Goldman Sachs International Europe has also seen an increase, households there still hold relatively little in equities. Pension and insurance allocations globally remain mixed, but equity exposure has generally risen, supported in part by recent regulatory shifts. n To manage higher equity allocations amid elevated valuations and macro uncertainty, asset owners should strengthen diversification and risk mitigation. We recommend selective real assets, factor/style and regional diversification, long-dated call options, and alternatives with low correlation to equities.

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Goldman Sachs Global Markets Daily

Tracking Rising Equity Allocations for Asset Owners

As we wrote in our recent Global Strategy Paper: Balancing Innovation and Inflation in Portfolios, the value of global financial assets has had a material boost from strong equity returns in the last 3-4 years. In fact, the performance of equities vs. bonds since the GFC has been close to the very high ex post equity risk premia last seen during the Golden 1920s and 1950s – and ex post equity risk premia have been above Tech Bubble levels as equity returns have been stronger for longer. Most recently, AI capex-related stocks globally have led equities higher.

As a result, global financial assets as tracked by our World Portfolio benchmark (see also the proxy GSMBWP01, developed by GS Global Banking & Markets) have drifted materially towards equities, in particular the Tech sector. Similar market value-weighted benchmarks tend to influence investor asset allocations as size indicates importance and liquidity of assets. Thus, prolonged trends in asset performance are not just driving shifts in global financial assets but tend to be a key driver of investor asset allocations. In this Global Markets Daily we track changing asset allocations for asset owners globally and investigate the drivers.

Exhibit 1: Equity risk premia have been among the strongest since the Golden 1920s and 1950s 10-year rolling annualised equity vs. bond performance (ex post equity risk premia) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% US World portfolio

Source: Robert Shiller, Datastream, Haver Analytics, Goldman Sachs Global Investment Research

The key asset owners are households, pension funds, insurance companies, sovereign wealth funds, endowments and foundations and family offices. Tracking asset allocations for some of those, such as sovereign wealth funds and family offices, is difficult owing to selective disclosures and often tax haven domiciles. However, in Global Strategy Paper: Investing in Everything, Everywhere, all at Once, we constructed a database of G10 investor asset allocations using a look-through approach based on aggregate national data on asset allocations for households as well as insurance and pensions to estimate indirect equity/bond exposure. Indeed, the equity allocations for those have been closely linked to equity performance, being particularly high in the late 1960s and 1990s – and more recently both in the US and G10 aggregate investor allocations to equities have reach new all-time highs, especially when extrapolating the