The Latest
Risk

Hiding behind diversification

Modern portfolio theory has created the impression that diversification is always a good thing, but asset owners could benefit from a more sceptical attitude. This article suggests over-diversification favours managers at the expense of returns to investors.
Risk

Global uncertainty requires risk rethink

Chief risk officer at the World Bank Group, Lakshmi Shyam-Sunder, says the extreme uncertainty of the global economy requires a new risk management framework, and investors should not take anything for granted in scenario planning. The World Bank has revised down its estimates for global growth to below 3 per cent.
Risk

Navigating two decades of funded status

The funded status of corporate DB pension plans has experienced unprecedented volatility in the 21st century. This article examines the sources of funded status volatility seen over the past two decades and discusses how plan sponsors of DB pension plans have adapted. It argues it is important to exercise care in the strategy that is chosen and in the timing of implementation.
Risk

Texas Teachers revamps AA, adds leverage

The board of the $154 billion Teacher Retirement System of Texas has approved changes to its strategic asset allocation as a result of its latest five-year study, increasing its allocation to private markets, risk parity and introducing leverage.
Risk

Risk aversion matters: life-cycle design

A key issue in life-cycle fund design is setting the right ‘glide path’ for switching from growth to defensive assets over time. As it turns out, risk aversion is far more important than pension fund balance. New research raises a note of caution over offering a single, one-size-fits-all life-cycle fund.
Risk

Finding risk: First State Super

A decade of ultra-low rates and mediocre growth does not mean that every year will yield low returns for investors, according to Damian Graham, the CIO of First State Super one of Australia's largest institutional investors. He talks about how to get enough risk in the portfolio.
<1of6>