Asset Allocation – Page 195
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Features
There is no pensions crisis - official
There is no pensions crisis. That is the assertion of new VB chairman Benne van Popta. “New schemes are still being established. And it’s very questionable that youngsters aren’t interested in solidarity and collectivity. A recent survey among 3,000 young people has shown that three-quarters of them want to save ...
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Features
Marketplace of discontents
As wary German investors emerge from the double-trauma of mistimed investments and stockmarket turmoil and decide how to move forward when their traditional haven of fixed income lies barren with yields at record lows, a well-meaning regulator is doing more harm than good. As in other walks of life, being ...
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Lessons for Europe
In 1981 Chile adopted a new pension system that has set a controversial pattern around the world. Unlike traditional systems, benefits are financed by investment accounts owned by workers. Chileans are sensitive about the starting point of their system, under Pinochet. But they do not worry about whether their system ...
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Fund with know-how
The way corporate pension funds are managed will change with changes in the corporations that sponsor them. Few organisations demonstrate this better than DSM Pensions Services (DPS), the in-house organisation that manages the Dutch pension funds of the Dutch firm DSM, the former Dutch state mines. The company was once ...
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Risk, return and pension funds
When it comes to economic policy, there is much to criticise about the centre-left government of German Chancellor Gerhard Schröder. Despite an unemployment rate not seen since the 1930s – namely around 5m – Schröder’s government is still not doing enough to make Germany’s labour market more flexible. Schröder’s government ...
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Interest rate risk matching for pension funds
New regulations such as IFRS require pension funds to bring their interest-rate risk more in line with the interest-rate risk of their liabilities. This usually means that the duration of the fixed-income portfolio needs to be extended or the allocation to fixed-income investments increased. The latter would mean that there ...
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Multinationals try to hold the line
Multinational companies based in the Netherlands are re-evaluating how much control they need to impose on their different pension plans around the world in light of ballooning costs and liabilities. But despite this increasingly close attention to their international liabilities and scheme designs – and the impact this is having ...
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Features
Making a splash in pension pooling
There is an increasing amount of interest in the establishment of pension pooling vehicles by multinational organisations seeking to combine their international or European pension investments in a single global or single regional fund. The pooling of pension assets in a single vehicle is an attractive concept as it generates ...
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Open market regime
A complete opening of the German market as a financial centre for hedge funds (which are now regulated by the German Investment Act (Investmentgesetz)) would not have been possible without modifying framework conditions for investments made by insurance companies, which form by far the largest group of institutional investors. Currently, ...
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A perplexing market
In 1853 a small fleet of five black US navy ships led by USS Powhatan and commanded by Commodore Matthew Perry, anchored at Tokyo Bay and opened up Japan to international trade after 250 years of isolation. A combination of diplomatic finesse backed up by gunboats had transformed the attitudes ...
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Revolution at the top
Europe’s largest pension fund, the mighty ABP has turned its approach to investment inside out. The equity portion of the E170bn portfolio that was 75% externally managed just three years ago, is now two-thirds internally managed. The 45% that was on an indexed basis has fallen to zero – the ...
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UK set to offer 50-year bonds
Pension funds will see an immediate benefit from the introduction of 50-year bonds by the UK government from this month. The ultra-long bonds are expected to help pension schemes better match their liabilities and help set the price of the synthetic products being expensively sold by investment banks. Gordon Brown, ...
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Features
Testing times for private accounts
If people are free to choose, they will choose freedom. This political philosophy, which was strongly embraced by Thatcher and Reagan in the 1980s, is now at the core of the Bush administration in every field, including economy. It is the very same principle that would justify a pension reform ...
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Features
Alpha overlay: employing active management risk
In simplest terms, alpha overlay is the process of generating excess returns through active management, independent of an underlying asset class. Properly executed, alpha overlay leads to better investment results with no more risk than traditional investment management for the following reasons: q The total return of a portfolio equals ...
