Full Breakdown
Sovereign Wealth Funds and Central Banks Shift to Energy Assets Amid Dollar Concerns
6/29/2026, 4:12:02 AM
Core Shift & Context
Sovereign wealth funds (SWFs) and central banks managing roughly US$29 trillion are rebalancing portfolios, according to an Invesco survey of 90 SWFs and 54 central banks released 28 June 2026. Trade tariffs, blocked shipping routes, the wars in Ukraine and the Middle East, and AI-driven energy demand have spurred a move toward energy-security and transition infrastructure while flagging dollar-reserve risks. Investors seek assets that can “take a hit and still hold it together,” prioritizing resilience over traditional liquidity.
Survey Data
- 80 % view energy security and transition projects as most credible, with infrastructure assets projected to reach 9 % of SWF holdings by 2026.
- 61 % of central banks say U.S. debt erodes the dollar’s reserve status (up from 20 % in 2024), and 29 % expect a weaker dollar in five years (vs 12 % in 2022).
- One-third plan to raise gold holdings; a European central bank has already replaced its U.S. custodian, and a Latin American counterpart is building non-U.S. custodial links.
Official Responses
Invesco head of research Benjamin Jones said investors are reassessing diversification assumptions and redesigning portfolios to endure a broader range of outcomes. Central banks disclosed reviews of U.S.-based custodians, counterparties and clearing infrastructure, citing geopolitical tension. The survey noted that concerns about the dollar were widespread and deepening.
Criticism & Risks
A central-bank respondent warned that shifting custodial arrangements could be seen as hostile by the United States. Critics cite three constraints: limited private-market capacity for large energy projects, a shortage of specialized operational expertise, and regulatory barriers such as CFIUS reviews that may block foreign sovereign stakes in critical infrastructure.
Conflicting Reports
The survey notes a 3 % rise in the dollar this year linked to the U.S.–Israel-Iran conflict, yet analysts caution that policy uncertainty and high U.S. debt could weaken the currency long-term. Data on how many institutions have fully transitioned away from U.S. custodians remain incomplete, and details of the planned gold purchases are not disclosed.
Quotes
- “In a world of inflation shocks, geopolitical fragmentation and more concentrated markets, investors are rethinking old assumptions about diversification and redesigning portfolios to withstand a wider range of outcomes.” — Benjamin Jones, Invesco head of research
- “Resilience is becoming a hard requirement, not a nice-to-have.” — Benjamin Jones
- “Concerns about the dollar were ‘widespread and deepening.’” — Invesco survey
- “This act in and of itself could be interpreted as hostile by the U.S.” — Central-bank respondent
Outlook
The survey points to continued allocation to energy-linked real assets, expansion of gold reserves, and development of non-U.S. custodial frameworks. Institutions will monitor U.S. fiscal developments and geopolitical tensions as they refine diversification strategies over the next few years.
