Public equities, and in particular US equities, have been one of the biggest return drivers of multi-assets portfolio in recent memory but asset owners are increasingly wary about their high valuations. Close to half (47 per cent) of asset owners cited equity risk as the biggest risk to their portfolios in the year ahead.

While interest rates are falling in major markets, inflation risk is back on the watch list as CIOs are cautious about potential fallouts from uncertain trade and immigration policies. Seventeen per cent of respondents are worried about inflation, compared to 9 per cent last year.

“As the world balkanises more, trade decreases and global flows decrease. It just becomes a more expensive environment from the ground up. In the US, you're seeing it already from a lot of more expensive imports,” Skriba said.

To combat the headwinds caused by inflation, more than half (53 per cent) of CIOs said they are investing in private markets with inflation-proof characteristics, which corresponds to the significant interest in infrastructure and other real assets. Around 33 per cent said they are adjusting the duration of their fixed income allocation, while 28 per cent said they are adding more floating rate exposure.

Respondents are least worried about climate risk and credit risk.