Executive vice-president and head of client analytics at PIMCO, Sebastien Page, who is tasked with bringing the intellectual and analytical capital of the manager to clients in a new consultant-type role, says tail-risk hedging is an effective way to reduce volatility and enhance returns.
Equities allocations have been slashed as a result of government changes to the liabilities of the Fonds de Reserve pour les Retraites (FFR) which prompted changes to the fund’s investment policy.
The natural disaster in Japan, that has tragically killed more than 3,000 people, caused millions of dollars damage and thrown the Middle East off the front pages, could also mark a pivotal moment in investments, with markets back to being triggered by macro concerns.
Inflation is a big risk for most pension funds around the world. The question is: what do you do about it? The interesting point, though, is if inflation is a ‘fat tail’ risk, maybe it’s already been too widely signalled.
Cost is the flagrant motivation in the trend for US pension funds to move assets in-house, but as this article explores, budgets also need to extend to the demands of investment research, travel and staff incentive compensation.
This MSCI research examines the volatility cycle of value stocks, shedding light on the changes in relative contributions of value and non-value portfolios to total risk.
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