The average Canadian pension plan’s funded ratio reached 120 per cent as of March 31, 2023, up one per cent over the quarter, while the average going-concern solvency ratio was 111 per cent, up four per cent, according to a new report by Normandin Beaudry. The report attributed these increases to the strong performance of financial […]
The world is entering an unpredictable period defined by increasing fiscal policy use, decreasing global trade and higher inflation and interest rates, according to a new research paper by the Investment Management Corp. of Ontario. “At IMCO, we believe that these global trends are leading us towards a new era of investing, one where it […]
The uncertainty about the direction interest rates will move in 2023 means defined benefit pension plan sponsors should be reconsidering their asset allocation strategies, says Ben Ukonga, principal at Mercer. “I don’t think anybody knows when, or if, interest rates will come down. If [inflation] comes down, the Bank of Canada’s likely to stop increasing […]
Despite concerns about global economic headwinds, the Bank of Canada’s successful efforts to curb inflation is capturing the attention of institutional investors, says Kathrin Forrest, a Toronto-based equity investment specialist at Capital Group Inc. “It’s surprised market participants,” says Forrest, referring to the central bank’s Oct. 26 decision to increase interest rates for the sixth […]
The use of leverage by U.K. defined benefit pension plans with liability-driven investment strategies left them vulnerable to a sharp rise in bond yields in September, says Erwan Pirou, Canada chief investment officer of wealth solutions at Aon. “Many plans in the U.K. are using leverage in their LDI strategies . . . to reduce […]
The Bank of England’s decision to intervene in the long-dated government bond market protected defined benefit pension plans with liability-driven investment strategies, according to a central bank official. “In practice, the move in [long-term bond] yields last week threatened to exceed the size of the cushion for many LDI funds, requiring them to either sell […]
Efforts by central banks to reduce inflation could spark a global recession, according to a new report from the World Bank. “If the degree of global monetary policy tightening currently anticipated by markets is not enough to lower inflation to targets, experience from past global recessions suggests that the requisite additional tightening could give rise […]
Investors should expect the unexpected in 2022, according to George Athanassakos, professor of finance and the Ben Graham chair in value investing at Western University’s Ivey School of Business. “2022 is likely to be filled with hidden hazards, both known unknowns and unknown unknowns,” he wrote in an email to the Canadian Investment Review. This […]
Central bankers in developed economies are downplaying the risk of long-term inflation rises, according to a new paper by the Fraser Institute. “Absent a sharp reversal of central bank programs of quantitative easing, forecasts that inflation will return to the two per cent target rate of central banks by mid-2022 at the latest are likely […]
Since stock markets can turn on a dime, long-term institutional investors may find some opportunities amid the current chaos. It’s been a long time since genuine panic hit markets, says Greg Taylor, chief investment officer and portfolio manager at Purpose Investments. “Generally, markets hate uncertainty and, arguably, we’ve never had a more uncertain time than […]