The best of 2022
In 2022 we introduced some new projects aimed at providing a deeper understanding of best practice and driving the industry to produce better outcomes for stakeholders.
USS: Low leverage and US exposure helped navigate UK bond market turmoil
Speaking at USS’s 2022 Institutions’ Meeting, Simon Pilcher told stakeholders that the asset manager had navigated market turmoil in the UK bond market by having less leverage than peer funds and diversification, explaining USS also hedges inflation and interest rate risk with US bonds.
Landmark tech investment boosts Denmark’s Lægernes Pension
Denmark’s Lægernes Pension has just completed a series of tech investments to further sharpen its investment processes. Michael Daniel Andersen, head of portfolio construction, believes natural language processing revealing what people are reading and researching will offer some of the most valuable new investment signals ahead.
Positive stock and bond correlation will make portfolios more volatile
Today’s positive stock-bond correlation means balanced portfolios will be more volatile without the natural hedge that bonds have long provided to stocks.
Posting bonds not cash as collateral: Belgium’s KBC on LDI
Belgium’s KBC Pensioenfonds, the pension fund for the banking and insurance group, runs a large LDI programme. But unlike UK pension funds who had to fire sell assets to post margin during the recent gilt crisis, KBC can post bonds, not cash, as collateral.
NZ Super culls equities, focuses on impact
New Zealand Super has radically slashed the holdings in its passive equities portfolio as it re-aligns the portfolio with a Paris-aligned benchmark. It’s part of the fund’s shift to a sustainable finance focus which includes improving the fund’s already-good ESG profile and a more long-term future focus on impact investing.
