UK pension plans concerned about how to invest in a volatile, late cycle environment may want to consider two practices: continue effective rebalancing and don’t postpone further duration hedging in anticipation of rising rates.
Using our 2019 Long-Term Capital Markets Assumptions and our estimate of the average current pension profile, we projected forward the buyout position of the average UK pension scheme.
Reaching for yield, which we define as buying bonds with wider spreads after controlling for sector and rating impacts, is a topic that frequently arises in the life insurance industry.
UK pension funds are moving to globalise their real estate holdings, taking advantage of increased diversification benefits and greater scale of investment opportunities.
Caught our eye: UK pension buy and maintain strategies could bring demand pressure to sterling corporate bonds
In an already tightly held market for sterling corporate bonds, even modest moves by UK pension funds to adopt buy and maintain strategies could create stiff competition for these assets.
Are your private credit allocations positioned for uncertainty?
Allocating to multi-asset credit managers, who seek out alpha opportunities without constraint, can improve risk-adjusted returns for the average DB plan.
We further discuss how institutional investors can protect their portfolios from late cycle headwinds and rising volatility so that they can be positioned for long-term success.
Listen to previous series on a variety of investment topics, asset classes and current themes