Environmental, social and governance factors are highly relevant to fixed income investment outcomes, but integration is complicated by the variety of issuers within the asset class. For corporate fixed income, integration is quite simple. Issuers could use the same frameworks as their equity counterparts, such as the Sustainability Accounting Standards Board’s materiality map, said Joshua Palmer, a […]
The Healthcare of Ontario Pension Plan is well-known for its liability-driven investing strategy, which helped it successfully weather the 2008 financial crisis. During the coronavirus fallout, in an era of historically low interest rates, the HOOPP is working on developing LDI 2.0. “We’re very focused on liabilities, but what you do when interest rates are […]
While rising government deficits and debt are concerning for many bond owners, they should actually be more concerned that deficits aren’t big enough, said David Bezic, an independent economic consultant, during a session at Benefits Canada and the Canadian Investment Review’s 2020 Plan Sponsor Week in mid-August. Many of the concerns around debt and deficits are founded on […]
The Healthcare of Ontario Pension Plan is well-known for its liability-driven investing strategy, which helped it successfully weather the 2008 financial crisis. During the coronavirus fallout, in an era of historically low interest rates, the HOOPP is working on developing LDI 2.0. “We’re very focused on liabilities, but what you do when interest rates are […]
The recent market turmoil caused by the coronavirus crisis has increased the focus on rebalancing decisions for many Canadian pension plans. As certain asset classes outperform others, a portfolio’s asset mix will drift overtime from its long-term targets. To ensure no significant divergence from the target, rebalancing triggers the sale of the strong performing asset […]
The Public Sector Alliance of Canada is asking the federal government to change the way it reports the unfunded liabilities of public sector pension plans, arguing the current practice makes the cost of the plans appear more volatile. The federal government implemented a new discount rate methodology in 2017/18 for pre-2000 pension liabilities. It moved from using a 20-year […]
The value of assets held by Canadian trusteed pension funds fell 3.3 per cent to $2.02 trillion in the first quarter of 2020, according to new data from Statistics Canada. Despite the quarterly drop, the funds posted a year-over-year increase of 2.5 per cent. Statistics Canada’s update noted the overall decrease in the quarter was […]
Market turmoil caused by the coronavirus served as a real-life test for bond funds and their liquidity, according to a new paper from the Bank of Canada. The amount of corporate bonds held by open-ended fixed-income mutual funds is growing, sitting at around 23 per cent of the total market of corporate Canadian-dollar denominated bonds, […]
While Canadian pension plans hold a quiet confidence, it turns out they actually do outperform their international peers when it comes to asset performance and liability hedging, according to a research paper from McGill University and CEM Benchmarking. The paper found Canadian plans achieve this outperformance using a three-pillar model: managing assets in-house to reduce costs, redeploying […]
As part of the federal government’s debt management strategy, it’s increasing long-term debt issuance. In particular, the government will be increasing issuance of the 10-year and 30-year bonds for 2020-2021 to an unprecedented combined amount of $106 billion, according to the federal economic and fiscal snapshot from July 8. The issuance is roughly five times […]