Mon, 26 Sep 2016 14:07:02 GMT
This is an article I wrote in 2003. Thirteen years later, the debate is still raging! Original article can be found here.
There can be little doubt that the defined benefit pension scheme business is going through a bad time, with UK and Irish pension schemes still underperforming. To address this problem, going forward, pension schemes and their sponsors should establish a platform to understand, monitor and control their short-term exposure to both the assets and the liabilities
Did they see it coming? - For the most part, no. While both pension schemes and insurance companies ...
Fri, 23 Sep 2016 16:34:18 GMT
28 June 2005 – Market Diary
Avid readers of this column will know that ten days ago, with the real yield at a June ‘05 high of 1.56%, we drew a trend line and tentatively predicted that those levels wouldn’t last.
It’s not that the market believes the 2% 2035 index linked gilt is fundamentally too cheap at 120.03; this asset’s price is driven by supply and demand.
The five storey early 1800s Victorian home in Belgravia costs £15m, not because the price of bricks has gone up in Central London, but because the buyers have decided Eaton Squa ...
Thu, 08 Sep 2016 09:30:37 GMT
Redington welcome the PLSA DB Taskforce’s work and focus on the challenges facing DB schemes.
Click to tweet >> Redington welcome @thePLSA DB Taskforce work. Read our thoughts on the DB landscape here: http://bit.ly/2cF10rY via @Redington
We have replied to the Taskforce’s Call for Evidence with our own views and experiences from working with schemes. Below is a summary of the key points from our response.
Schemes face many challenges in a volatile macro environment. Generating the returns and contributions to give members financial security in retirement ...
Wed, 20 Jul 2016 08:24:56 GMT
On Friday, June 24th, Britain voted to leave the European Union. It’s fair to say this surprised a lot of people (on both sides), including the markets. Falling interest rates, a weaker pound and political uncertainty has left a lot of people feeling on edge.
For those of us responsible for managing pension funds, can it be useful to reflect on the “VUCA” of our time.
Volatility, Uncertainty, Complexity and Ambiguity
Derived from the US military and now used in corporate strategy, VUCA is a term used to describe extreme conditions. For those of us in the w ...
Fri, 24 Jun 2016 16:06:53 GMT
The ramifications for investors of the UK’s referendum decision will take some time to materialise.
We are entering uncharted territory - nobody knows precisely how Brexit will be implemented or its consequences.
What is clear is the result will herald a period of considerable uncertainty and market volatility.
If we have learnt anything from history, it is that these kinds of major events happen surprisingly regularly. Which is why it is so important to design and implement a robust, risk-managed and well-diversified investment strategy for the long term. And why it so imp ...
Thu, 16 Jun 2016 11:19:38 GMT
What are the economic implications, potential market impact, and consequences for UK pension schemes of Brexit?
In my previous post, I discussed the timeline for Brexit, should it happen, and split it into three periods: pre-referendum, post-referendum negotiations and post-negotiations.
The purpose of establishing these divisions was to emphasize that leaving the EU would not elicit an immediate step-change for the UK economy. The change would be gradual and the economy would behave differently in each period.
With that in mind, let’s consider (briefly!) the economic impli ...
Thu, 19 May 2016 12:34:13 GMT
At Redington we read with great interest the pension regulator’s DB funding statement 2016. I thought the four key takeaways from an investment perspective were:
1. Acknowledge the importance of negative cashflow, and plan for it.
“As schemes mature, liquidity planning is becoming an important consideration, especially where the cash flow requirements represent a significant proportion of the scheme assets. Market developments may mean that schemes are forced to sell assets at lower than expected prices in order to meet cash flow demands. This could put increased pr ...
Mon, 25 Apr 2016 11:59:02 GMT
Automobiles started out as a toy for the rich, a symbol of excess.
They were complex and needed expert drivers. Then, Henry Ford came along and turned it all on its head. The Ford ‘Model T’ was revolutionary for its time - it helped bring cars to the masses and took the mystery out of the ‘horseless-carriage’.
Is the way we look at hedge funds not dissimilar to the infancy of the automobile industry?
Surrounded by mystery, a black box that’s reliant on the magic of manager skill, so-called ‘alpha’. People pay for things they don’ ...
Wed, 13 Apr 2016 11:48:32 GMT
Unless you have been living on Mars for the last few months...
In a cave, with your eyes shut, and your fingers in your ears...
It will have come to your attention that there will soon be a referendum on these shores.
Depending on your political hue, this referendum is one of two things:
An opportunity for the United Kingdom to unshackle itself from an ossified bureaucracy, to protect its borders, and to finally Make Britain Great Again.
A grave threat to the prosperity of the British people, which has been seized upon by political opportunists for personal ...
Thu, 04 Feb 2016 12:09:00 GMT
Alpha describes the excess returns a fund can generate relative to the return of a reference benchmark. This benchmark return is called Beta.
Traditionally, these benchmarks were market cap weighted indices, such as the FTSE All Share or S&P 500. Since the 1970's, it has been possible to buy cheap access to them via passive funds.
Click to tweet >> An increasing number of Smart Beta strategies have tried to improve on the market cap weighted benchmark: http://bit.ly/1Po1gnP
In recent years, an increasing number of Smart Beta strategies have tried to improve on the ...