January 2024
17Jan

European pension funds turn to co-filing at Shell to up climate credibility

Major European pension funds are among a record number of investors who have agreed to co-file a shareholder resolution at Shell with NGO Follow This in a bid to get the oil and gas major to set tougher emission reduction targets. The biggest support Follow This received previously was co-filing from 17 investors for a shareholder resolution at TotalEnergies’ annual general meeting last year, helping it secure 30% of votes. The group of co-filers for this year’s Shell resolution is bigger and...

January 17, 2024
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17Jan

Navigating Pension Investments: A Reader’s Concern and an Expert’s Advice

In an era where financial security is a growing concern, one reader, Sophie, finds herself grappling with pension investments and the realization of her lower risk tolerance. Aged 43, Sophie harbors fears about her current pension value of 115,985, compounded by the goal of retiring with an annual income of 30,000 plus the state pension. Understanding Sophie’s Pension Portfolio Sophie’s pension portfolio is diversified across three different pensions. She holds two with Aviva from previous employers, which she had reinvested, leading...

January 17, 2024
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12Jan

The State of Pensions 2023: Year End Update

By Anthony Randazzo & Jonathan Moddy  In 2023, U.S. public pension funds remain fragile. According to Equable Institute’sState of Pensions 2023 report, state and municipal retirement systems are on track to miss their investment targets and are unlikely to see meaningful improvements in their unfunded liabilities or funded ratio in 2023. In this post, we will look at pension funding trends and detail the health of pension funds in an increasingly unpredictable market and where risky investments are more popular than ever....

January 12, 2024
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11Jan

China Is Fast Losing Its Place as Must-Have in Global Portfolios

Years of harrowing losses have left Chinese stocks with a diminished standing in global portfolios, a trend that’s likely to accelerate as some of the world’s biggest funds distance themselves from the risk-ridden market. An analysis of filings by 14 US pension funds with investments in Chinese stocks show most of them have reduced their holdings since 2020. The California Public Employees’ Retirement System and New York State Common Retirement Fund, among the nation’s biggest pension investors, cut their exposure...

January 11, 2024
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05Jan

US. Expect familiar worries for 2024 as pension funds mull economy, interest rates

U.S. pension fund executives are taking a cautious approach to 2024, as they await the answer to how much the economy will slow and when and by how much the Federal Reserve may cut interest rates. While much remains unknown, they are seeking returns in places like fixed income and real estate, where they believe the greatest opportunities loom. There's also the matter of the upcoming U.S. presidential election. Christopher Ailman, chief investment officer of the $304.9 billion California State Teachers’ Retirement...

January 5, 2024
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05Jan

China too big to ignore, but policy will dictate growth, investors say

China's growth outlook remains murky but global investors can't afford to ignore the world's second-largest economy, although factors such as domestic policies, geopolitical developments and consumer sentiment will decide its growth trajectory, investment managers said. They also argue that upcoming restrictions by the U.S. and its partners on the flow of certain technologies to China has bifurcated the world scientific community and will hurt the global economy, even as some investors outside of the West, such as the Middle East,...

January 5, 2024
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December 2023
21Dec

US. Despite Concern from Lawmakers, US Pensions and Endowments Pour into China

American public pension funds and university endowments continue to invest billions in China, according to a report from Future Union, an advocacy organization. The “Rubicon Report” criticizes institutional investors and funds for financing what the organization calls adversarial states. According to data collected by Future Union, public pension funds in 43 U.S. states currently hold investments in China and Hong Kong, according to private and public databases as of June 30. Of the 74 largest pension funds, 29 have made...

December 21, 2023
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19Dec

Private credit attracts billions from U.S. pension funds

U.S. state and local retirement funds are pumping billions into private credit, joining the stampede into a booming sector of finance in the pursuit of higher returns. These systems are collectively allocating at least $100 billion of their roughly $5 trillion in assets into private debt, according to Equable, a bipartisan pension researcher founded by public finance leaders. While that's only a sliver of their holdings at present, funds' private credit positions have been steadily growing and are poised to...

December 19, 2023
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15Dec

Innovative Combo Product Design Embedding Variable Annuity and Long-Term Care Insurance Contracts

By Yang Shen, Michael Sherris, Yawei Wang & Jonathan Ziveyi This paper presents a novel combo insurance product design consisting of a variable annuity contract embedded with guaranteed minimum income benefits and long-term care insurance. This combo product provides enhanced benefits when the policyholder is functionally disabled. The Hamiltonian Monte Carlo simulation technique is utilised for numerically valuing the combo product whose underlying fund is proportionally invested in multiple asset classes. Product features including the elimination period and the maximum...

December 15, 2023
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15Dec

Scale Economies, Bargaining Power, and Investment Performance: Evidence from Pension Plans

By Tjeerd de Vries, S. Yanki Kalfa, Allan Timmermann & Russ Wermers We explore the relation between the size of a defined benefit pension plan and its choice of active vs. passive management, internal vs. external management, and public vs. private markets. We find positive scale economies in pension plan investments; large plans have stronger bargaining power over their external managers in negotiating fees as well as having access to higher (pre-fee)-performing funds, relative to small plans. Using matching estimators,...

December 15, 2023
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