Asset Allocation – Page 233
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Features
Corporate pension risk in Europe
As we all know, pensions are receiving substantial attention in the wider press, both in financial and non-financial publications. This has been triggered by a combination of factors: equity underperformance has eroded asset values, falling bond yields have driven up liability values and increased accounting transparency has made the resulting ...
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Costs driving flight from DB
Historically, defined benefit (DB) rather than defined contribution (DC) has been the commonest type of occupational pension in the UK. It is still the dominant plan type. The latest benefit design survey by consultant Watson Wyatt found that 58% of the occupational schemes surveyed were DB while only 23% were ...
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Directive keeps them guessing
When it comes down to multinational pension arrangements in Europe, and, more particularly, the endeavours of European legislators to find a solution to the issue of pan-European pensions, the strangest scenarios can often seem quite commonplace. And so it was at the 2002 IPE Multi Pensions conference in Amsterdam at ...
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Drag factors on recovery
With the continued threat of war in the Middle East hanging over the markets stalling a full-scale recovery, analysts agree that Europe’s equity markets still can’t find real stability, despite some relatively good trading recently and the ECB’s larger than expected 50 basis point interest rate cut. Many predict that ...
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Follow first principles
It is important to recognise that asset allocation is inherently a two-stage process. The first step should be to formulate a benchmark position, based on weighing the investor’s return desires against their tolerance for risk, be it in absolute terms or relative to a liability ‘benchmark’. Once the investment policy ...
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Off the floor
With the FTSE 100 index poised to push up through key resistance levels, sentiment in the London equities market has brightened. But strategists are not holding their breath. Share prices in the UK are unlikely to make any lasting upside progress just yet. The fact that prices have come off ...
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French savings plans' rapid progress
For the last two years, the concept of employee savings, such as saving plans or schemes for profit sharing, has received much publicity from the media. The potentially large volumes of assets available has attracted a number of new providers. For a company, the choice of a fund manager is ...
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Gearing up for pensions
Asset management in the Baltic states is a mixed scene, ranging from investment funds and private pensions in Estonia and Latvia to negligible retail activity in Lithuania. In Lithuania, tax complications have so far prevented the establishment of local investment funds. Meanwhile the private pensions market will only start operating ...
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Slaughtering herds
It’s that time of year again when we ask ourselves – just what investment policies and strategic asset allocation decisions make sense in today’s market? The problem is that we are asking ourselves that question rather too often lately. Unfortunately, we don’t appear to have much in the way of ...
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Portuguese improvement
A change in asset allocation by Portuguese pension funds has resulted in an improvement in returns in the third quarter, according to consultant Watson Wyatt. Median returns from the country’s segregated funds for the third quarter were –2.4% from -3.2% the previous quarter. The third quarter was a difficult period ...
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Make liabilities the starting point
As we head for the third straight year of falling equity markets with pension fund surpluses no longer the norm, we are all too painfully aware of the importance of aligning pension strategies with their ultimate objective. Pension assets need to be invested with reference to pension obligations (ultimate cashflows) ...
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Muddle through scenario
Every one of our investment decisions – from the strategic allocation of assets between equities and fixed-income securities to the choice of individual securities – is based on a combination of macro and micro economic information. When assessing macro-economic trends, we attach great importance to the information we receive on ...
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Time to share risks
One factor which could slow the flow from DB to traditional DC schemes is the growing interest in hybrid pension plans in the UK. Actuaries Lane Clark Peacock point out in their annual survey, ‘Accounting for Pensions’, that traditional final salary DB schemes and occupational DC schemes represent extremes of ...
