ADIA posted annualised rates of return of 7 percent in 2017
The short-term outlook for global growth remains positive, with a prevailing interest rate environment, ample liquidity and narrower credit spends combining to create favourable conditions in 2018, according to the Abu Dhabi Investment Authority (ADIA).
In its 2017 review, ADIA noted that a “virtuous circle” of economic conditions in the United States should support continued growth, as tight labour conditions lead towage inflation, which should encourage consumption and an uptick in hiring.
According to the review, companies are likely to expand capacity and investment spending.
The review also noted that technology will continue to be a powerful driver of change in the coming year.
“One need only look at the performance of technology across global equity markets last year to recognise that something is stirring,” the report noted. “This technology boom is based on real improvements in computing power to process and analyse exponentially growing volumes of data.”
“It underpins real businesses that are growing revenues, market share and earnings,” it added. “Importantly, our own business of investing is absorbing new tools and approaches that can improve abilities to identify opportunities and manage risk.”
In 2017, ADIA posted higher annualised rates of return, which rose to 7 percent compared to 6.9 person in 2016. The fund’s 20 year annualized rate of return, for its part, went up to 6.5 percent in 2017, compared to 6.2 percent the year before.
“In investment terms, 2017 provided a reminder of the ability of capital markets to surprise – in this case in a positive way,” ADIA managing director Sheikh Hamed bin Zayed wrote in the review. “Global equity markets appreciated close to 25 per cent in US dollar terms. Even with lackluster results from global bonds, balanced portfolio returns reached high double digits.”