December 2024
13Dec

Pulse Report. Afire International Investor Survey

By Afire International Investor Survey   As an extension of housing concerns in the US, trends in the insurance industry can sometimes serve as portents, or as evidence. At the junction between the global, environmental effects of climate change and the frequently counterintuitive logic of homeowners, renters, and consumers in the US, the question of insurance is best understood as an analogy. For example, earlier in 2024, AFIRE asked investors if they agreed or disagreed with the sentiment that the industry...

December 13, 2024
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13Dec

Private Equity for Pension Plans? Evaluating Private Equity Performance from an Investor’s Perspective

By Arthur Korteweg, Stavros Panageas & Anand Systla We evaluate private equity (PE) performance using investor-specific stochastic discount factors, and examine whether investors could benefit from changing their allocation to PE. Plans invest in PE funds with higher average risk-adjusted performance. This is mainly due to access to successful PE managers, not superior selection skill. Decomposing returns into risk-compensation and "alpha", we find that some plans obtain higher PE returns by taking more risk without earning higher, and in some cases earning lower,...

December 13, 2024
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November 2024
29Nov

Chinese Pension Insurance, Risk Attitudes, and Household Asset Allocation

By Hua Chen, Han Xiao, Yunxiao Guo & Ding Li Optimising household asset allocation is vital for expanding domestic demand in developing countries. This study uses 2017, 2019, and 2021 China Household Finance Survey (CHFS) data to explore pension insurance's effect on asset allocation among Chinese households. Key findings include that higher pension balances encourage investments in riskier assets. Specifically, for every 10% increase in pension account balances, the likelihood of investing in the risk asset market rises by 5%, and...

November 29, 2024
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October 2024
16Oct

Who Owns the City? Pension Fund Capitalism and the Parkdale Rent Strike

By Jamie Shilton Canadian public pension funds play an increasingly significant role as institutional investors, including in the domestic residential property market. Some scholars have suggested that pension fund investments of this kind result in a form of public ownership, sometimes characterized as “pension fund socialism.” However, the actual character of pension fund investment in Canada is much more akin to a financialized pension fund capitalism, with public pension funds adopting investment strategies consistent with private financial market actors. In...

October 16, 2024
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11Oct

Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice

By Aizhan Anarkulova, Scott Cederburg & Michael S. O'Doherty We challenge two central tenets of lifecycle investing: (i) investors should diversify across stocks and bonds and (ii) the young should hold more stocks than the old. An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests. These findings are based on a lifecycle model that features dynamic processes for...

October 11, 2024
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September 2024
27Sep

Pension scheme assets – how they are invested and how and why they change over time

By The Pensions Policy Intitute We know both ‘quite a lot’ and ‘not enough’ about the assets that back current and future retirement incomes. Quite a lot because there are several sources of data that map pension fund assets and the way in which they are invested. Not enough because there are gaps in our knowledge and a multiplicity of data sets that classify assets in slightly different ways. The timing of different reports can also create difficulty mapping assets...

September 27, 2024
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20Sep

The Rise of Alternatives

By Juliane Begenau, Pauline Liang & Emil Siriwardane Since the 2000s, U.S. public pensions have shifted their risky investments towards alternative assets like private equity and hedge funds, some more aggressively than others. We explore several explanations for these cross-sectional trends, focusing on those implied by the mean-variance models used by most pensions. Our evidence suggests that the rise of alternatives has been fueled by an increase in their perceived risk-adjusted returns relative to public equities. Pension beliefs are shaped...

September 20, 2024
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13Sep

Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice

By Aizhan Anarkulova, Scott Cederburg & Michael S. O'Doherty We challenge two central tenets of lifecycle investing: (i) investors should diversify across stocks and bonds and (ii) the young should hold more stocks than the old. An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests. These findings are based on a lifecycle model that features dynamic processes for...

September 13, 2024
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06Sep

Positioning for change: Public pensions after the great moderation

By Institutional Investor Survey   Investors apparently predict 2023 will look much like 2022, as rising interest rates and market volatility also remained top of mind for decision-makers. They also forecasted another tough period for investment returns next year. Concerns over inflation and a potential economic downturn loomed large in our survey as asset allocation influences.1 The top three concerns for these decision-makers are the need to navigate high inflation, market volatility and rising interest rates. Get the report here

September 6, 2024
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July 2024
31Jul

Climate Polarization and Green Investment

By Anders Anderson & David T. Robinson We build a nationally representative sample of retirement savers in Sweden to study how climate polarizaton affects individual investment decisions. After the record-breaking heat wave of 2018, respondents in regions with strong support for a right-wing, anti-climate party grow less concerned about climate change, while respondents outside these regions grow more concerned. Those growing more concerned rebalance their retirement portfolios toward climate-friendly mutual funds; those growing less concerned rebalance out of these funds,...

July 31, 2024
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