The State Teachers Retirement System of Ohio has warned of a “material” increase in US recession risk compared to last year as the fund braces for a wider, “negatively skewed” distribution of outcomes in the next 12 months. It came as the mature plan, which is 81 per cent funded, is tilting to fixed income and new asset classes like liquid alternatives over equities.
Investors should shape strategies that protect against the downside, said Jeff Gardner, senior portfolio strategist, Bridgewater Associates. Speaking at the Fiduciary Investors Symposium at the Chicago Booth School of Business, he said that investors should prioritise protecting against losses in the current environment: increasing returns can be additive to long-term wealth, but missing the big
Daniel Celeghin, managing partner at INEFI, argues globalisation is not dead but has morphed so that post-2022 globalisation is a series of deeply rooted local investments that together result in a global portfolio.
The traditional 60/40 portfolio allocation is no longer enough. The opportunity for alpha is not gone, but the low-hanging fruit has long been harvested, and the path toward higher absolute returns has gotten far more nuanced according to a new report from the Chartered Alternative Investment Analyst (CAIA)
The 2022 annual CIO Sentiment Survey, a collaboration between Top1000funds.com and CaseyQuirk, finds asset owners most concerned about equity valuations and inflation. After three years of fee rises, asset owners are paying less for investments while CIOs in 2022 are also working with a smaller manager roster.
Incorporating uncertainty into the asset allocation process is a complicated but essential ingredient of building portfolio resilience, something investors are valuing more than ever in an environment where inflation, geopolitical and climate risks dominate. GIC and BlackRock have both developed asset allocation frameworks that incorporate investors’ aversion for uncertainty.
Despite threats to pension funds’ funded status including the investment environment, plan maturity, longevity risk and low interest rates affecting the funding valuation, Canadian funds HOOPP and OPTrust celebrated healthy funded status in recent reports. Top1000funds.com looks at their approach.
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Asset Allocation