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European funds start rebalancing process
Pension funds in Europe are rebalancing their portfolios to reflect huge falls in equity markets as the financial crisis forces them to re-evaluate the relevance of their strategic asset allocation in the new market environment.
Happy workers make investors happy too
Good companies to work for are also good companies to invest in, according to new research by Alex Edman of the Wharton School, University of Pennsylvania. In a recent paper, Edmans says there is a direct positive correlation over the long term between employee satisfaction and stock market returns for the companies they work for.
Stopping traffic: Bankpension’s solvency strategy
As markets turn south, remaining solvent is the biggest challenge facing Bankpension, Denmark’s 1.6 billion (US$2.1 billion) pension fund. Chief investment officer Leif Hasager talks to Kristen Paech about the measures the fund has introduced to protect against downside risk.
The Fraying U.S. – China Co-Dependency
After many years of extraordinary growth, China has clearly been adversely affected by the global economic recession. Its own economy is slowing rapidly, with declines in exports, property prices, and fixed investment. In response, the Chinese government. strongly motivated to maintain stability, is injecting large doses of fiscal stimulus and making other administrative efforts to
Black Monday and Black Swans
Investors need to be aware that rare events with an extreme impact that, afterwards, we think we could have predicted – in short, black swans – happen in the markets. Those who are trying to measure risk in the financial markets need to carefully distinguish risk, with its probabilities, from uncertainty, which cannot be measured.
Canada’s PSPP shifts focus to funding
One of Canada’s largest public pension plans has diverted its immediate attention away from investments, and in particular new risk management tools, to solve its funding deficit issues. Amanda White spoke to PSPP’s plan board manager about their concerns.
Why Fundamental Indexation Might – or Might Not – Work
Some proponents of fundamental indexation claim that the strategy is based on a new theory in which market prices of stocks deviate from fair values. A key assumption in this approach is that fundamental weights are unbiased estimators of fair value weights that are statistically independent of market values. This article demonstrates that, except in
European asset allocators fall short of academic best practice
Investment managers in Europe fail to employ techniques that avoid generating overly-concentrated portfolios because of poor input estimation, and do not fully take into account extreme risks when constructing portfolios, according to research by the EDHEC Risk and Management Research Centre.
…as Government quantitative measures push up liabilities
Quantitative easing measures introduced by the UK’s Bank of England aimed at kick-starting the local economy have had the unintended consequence of pushing up UK pension scheme liabilities.
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