August 2017

30Aug

South Africa. Can the average investor afford such significant underperformance?

I recently attended a board meeting of an independent financial advisor, and the following graph was included in the board pack: The Asisa average for SA Multi Asset High Equity funds over the last 12.5 years makes for interesting reading. This particular category in the Collective Investment Scheme (CIS) space averaged 363.3, which means that if a R100 was invested on December 31, 2004, a client would see an amount of R363.30 returned to him on the June 30, 2017, that...

August 30, 2017
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30Aug

Pension deficit now equals 70% of UK companies’ entire annual profits fuelling retirement fears

The huge deficit in the pension funds of the UK’s biggest listed firms rocketed last year, adding to concerns over how companies’ schemes will fund workers’ retirement incomes. The gap between the expected returns of FTSE 350 companies’ pension funds and the amount they are projected to pay out jumped by £12bn to £62bn in 2016, according to new research by actuaries Barnett Waddingham. The yawning gap is equivalent to 70 per cent of the entire annual profits of those firms...

August 30, 2017
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29Aug

UK. Report hits out at lack of advice for DB members

Just five per cent of defined benefit schemes provide access to a named financial adviser selected by the trustees or employer. While nine in ten schemes stress the importance of seeking financial advice to members, a new report from Royal London and management consultants Lane, Clark and Peacock shows significant gaps in getting the required help. The report says: “Whereas a transfer out of DB rights worth £30,000 or more carries a requirement to take financial advice, there may be no...

August 29, 2017
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29Aug

US. Pensions May Yank Up to $1 Trillion From Stocks to Trim Risk

Pension funds are poised to shift as much as $1 trillion from stocks to bonds in coming years to lock in gains and limit the potential for big losses, according to Wells Fargo & Co. “Definitely there’s a lot of money that will want to move,” said Andy Hunt, head of global credit and liability-driven investing at Wells Fargo Asset Management, predicting it will happen within roughly five years. “Best case, it’ll be between a half a trillion and a...

August 29, 2017
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29Aug

Pension Fund Dumps Stocks Because ‘There Is No President In The U.S.’

A $53-billion public pension fund isn't sure, so it's dumping the American stocks in its portfolio. Finland's Varma Mutual Pension Insurance Company— the country's largest pension fund— told Bloomberg it has reduced its exposure to stocks by five per cent, most of that reduction coming from U.S. stocks. "It seems as if there is no president in the U.S.," Varma CEO Risto Murto said. "If I look at what is the moral and practical power, there is no longer a traditional...

August 29, 2017
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28Aug

Nigeria. Pension fund investment in govt securities is driven by returns, safety – Leadway Pensions

Mr. David Alao is Acting Asset Manager of Leadway Pensure and a member of the Pension Fund Operators Association of Nigeria (PenOp). In this discourse he maintains that pension funds investment in government securities should be channelled into infrastructure development. A total of 77 per cent of pension fund is invested in federal government instruments and about four per cent in corporate bonds while about six per cent is in money market. If the federal government instruments can yield returns...

August 28, 2017
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28Aug

Australia. Time for longevity risk-pooling: Mercer

Mercer consultants have told a gathering of institutional investors and advisers they must incorporate longevity pooling into portfolios to provide the peace of mind retirees want. Mercer Australia senior actuarial partner Dr David Knox argued that investment managers need to take “an integrated, more holistic approach than just concentrating on investment portfolios”. He said longevity pooling should be incorporated into retirement income portfolios in a way “that maintains the growth ratio, the exposure to growth assets, and the expected return, and...

August 28, 2017
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28Aug

Canada. CPPIB to end Kotak JV plan for stressed assets

Canada's largest pension fund CPPIB will call off its proposed joint venture with Kotak Mahindra Group to invest in stressed assets in India. The $525-million fund that was announced in March 2016 will be wound up as it failed to find investments in stressed assets, said two people with direct knowledge of the development. Kotak Group will now go alone with commitments from some sovereign funds such as Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority on a deal...

August 28, 2017
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25Aug

Croatia. Pension Funds in Red Due to Agrokor

Over the past year, four mandatory pension funds- AZ, Erste Plavi, PBZ CO and Raiffensen OMF - have increased the number of memebers by about 55,000 so at the end of July, they had 1.82 million members. The main reason for this, it is assumed, is the growth in employment, which also means the further growth in the pension funds assets, reports Jutarnji List on August 24, 2017. Read more Total Croatia News

August 25, 2017
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25Aug

US. Health care will cost couples $275,000 in retirement

A couple retiring this year will need an estimated $275,000 to cover health care costs in retirement, according to Fidelity. That's a 6% increase over last year. Of course, it's a ballpark number. The true cost depends on a variety of factors like your health and how long you'll live. Plus, there's ongoing uncertainty about what the health care landscape will look like in the future. "No matter how you slice it, the number is brutal," said Adam Stavisky, senior vice...

August 25, 2017
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