As the year begins, it is instructive for pension fund managers and asset allocators to consider various macro risk scenarios that are not base-case predictions but rather relevant considerations for stress testing portfolios. It can be useful to understand how individual asset classes would react under each scenario and the resulting portfolio performance. As part of this exercise, consider the impact on liabilities and whether the risk scenario would induce pension managers to consider a change to asset allocation to suit the new environment.
We are in the midst of historic times, as sovereigns hang on the edge of default, the inflation/deflation debate remains unresolved and gold trades at a historic high. As a manager or director of a pension fund, this is a critical juncture to understand what can go wrong for your fund in particular scenarios. To […]
Originally from our sister publication, Advisor.ca Alternative investments will increasingly become part of institutional and high net worth (HNW) portfolios. In fact, they are likely to blend right in to the traditional portfolio, supplanting traditional notions of what the portfolio core should look like. “Alternatives, at least for the next few years, are increasingly going […]
Risk is a central concept in investing, particularly for retirement solutions in DC pension plans. However, the analysis of risk is potentially complicated, as the tolerance levels of individual plan members can vary considerably. Most, if not all, individual plan members share the basic factors influencing risk tolerance. Virtually all members want to accumulate a […]
It’s certainly no secret that during the last decade, the trend within the Canadian pension landscape has been for plan sponsors to move away from traditional DB plans and toward DC plans. This need was primarily driven by the desire to do away with plan risks around longevity, interest rates and investments that were becoming […]
Pension funds can’t afford not to have a view on emerging markets, according to Paul Kapsos, portfolio manager, emerging markets, with the Ontario Teachers’ Pension Plan. Speaking at the Pension & Benefits Summit on April 28 in Toronto, Kapsos added that the long-term risk/return trade-off has been positive to emerging market equities. But which of […]