In a period when equities performed better than other asset classes, American DC retirement plan members cut their holdings in domestic equities and increased their investments in fixed income assets in 2012.
Coverage of the 2013 Global Investment Conference
Indices add transparency, could boost ETFs.
Fiera Capital Corp. has purchased UBS Global Asset Management (Canada) Inc.’s Canadian fixed income, Canadian equity and domestic balanced account business, representing assets under management of approximately $8 billion for a cash consideration of $52 million, subject to certain adjustments.
Sun Life Financial has completed the first conversion of an annuity buy-in to an annuity buyout in Canada, according to a news release from the insurer.
While fixed income strategies have long been recognized as good sources of cash flow generation, alternative investments (real estate and infrastructure) and equity strategies are other useful options to help meet the needs of pension plans focused on yield-oriented strategies.
Why Canada tops US for fixed income.
Coverage of the 2012 Risk Management Conference.
Extraordinarily low interest rates are one of the legacies of the recent financial crisis: as of July 2012, the Bank of Canada has fixed the overnight rate at 1%, and the 30-year bond yield stands at around 2.6%. Such low rates have particular implications for pension plan sponsors seeking returns in the fixed income asset class.
In a world where markets turn on a dime, the underlying economic fundamentals are often shoved to the side. “Diamonds are forever,” noted Avery Shenfeld, senior economist with CIBC World Markets, in an economist panel at the Benefits Canada Benefits & Pension Summit. “But when it comes to global economies, nothing else is really forever.”