In November 2009, I questioned if the pension industry is an example of ‘The Peter Principle’ in action. In other words, has the pension industry been promoted to its own level of incompetency? My conclusion was no, due to the very difficult and prolonged landscape presented by low interest rates for defined benefit pension plans. […]
The considerable traction gained by liability driven investing (LDI) both in Canada and abroad is well documented. Ongoing challenges to pension plan funded status stemming from weak equity markets and declining interest rates during the past decade have surprised some and, almost certainly, disappointed most. The growth and maturity of pension plan liabilities and the […]
The litany of ignoring global diversification warnings is familiar to any student of portfolio management. With Canada representing less than 5% of global equity markets, it’s only fitting that investors diversify globally to find best-in-class companies no matter where they’re located. Of these, emerging and developing economies account for 85% of the world’s population and […]
Canadian pension plans have become more global on the equity side over the past decade, but many haven’t crossed the border beyond domestic fixed income strategies. Avoiding global fixed income markets, however, limits the potential for strong risk-adjusted returns over the long term. Underexposure to the wide spectrum of fixed income investments could mean pension […]
Since the global financial crisis, asset allocation isn’t what it used to be. That is the main message behind State Street’s latest report, which explains how the line between strategic and tactical asset allocation has become porous—resulting in a more holistic decision-making process regarding risk management. In Vision Focus: Rethinking Asset Allocation, State Street illustrates […]
Alternatives has been the buzzword among pension investors for the past few years. Investments in alternative asset classes were going to solve everyone’s problems—improve returns and funded positions, and reduce reliance on equity markets and their associated volatility. Unfortunately, this has not turned out to be the case for many. In 1999, pension funds in […]
Investors looking for a leg up should pay attention to the mood of the Chinese business community four months ago and whether it’s an even or odd-numbered year, according to portfolio managers with Fidelity Investments. In a recent webcast on market volatility, Fidelity’s head of Canadian equities Andrew Marchese and asset allocation director Trevor Greetham […]
The Canada Pension Plan’s (CPP) reserve fund was among the top-performing funds in terms of investment returns during the “boom and bust” era of 2005–2009, but overall global pension fund assets are still below pre-crisis levels, according to an Organisation for Economic Co-operation and Development (OECD) report. The organization’s July issue of Pension Markets in […]
The number of Canadian investment managers calling themselves bears is growing due to recent economic developments, according to a survey. The latest quarterly survey from Russell Investments shows that Canadian investment managers bearish on the Canadian stock market increased to 19% from 9% three months earlier. At the same time, the percentage of managers considering […]
Steady state: securities lending post-Lehman June 25, 2010 | Scot Blythe Securities lending has come through a rough two years globally. Surprisingly—or perhaps unsurprisingly, given the country’s seemingly inherent financial conservatism—Canada hasn’t been affected all that much. In fact, one observer thinks custodians serving Canadian clients “ought to be congratulated for not getting carried away.” […]