US – Pension fiduciaries in the US should take extra care in committing assets overseas, suggests analysis by InterSec Research, the Deutsche Bank owned pension portfolio measurer.
The research company has launched an ongoing analysis of currency, country, sector and stock selection for US pension fund assets invested overseas, in answer to the growing global debate about which investment processes provide optimal risk-return characteristics for money managers.
InterSec says that while it would be premature to draw over-all conclusions regarding country versus sector management, the results indicate very different skill sets being enjoyed by the same money management company, depending on how it is analysed. Money managers should take care in extolling their virtues and pension fund managers should be careful in selecting external managers for their assets, warns the research.
“ There is considerable value-added in applying country and sector level attribution for both pension funds and their international money managers. We are already applying similar analytics to European, Swiss and Italian portfolios,” says Chris Nowakowski, managing director of InterSec.
For the research InterSec has concentrated on the offshore mandates of US pension funds, which are benchmarked at either the MSCI EAFE 20 developed country index or the MSCI EAFE 10 sector index.
Portfolios are analysed both by country and by industry sector.