May 2022

Millennials Will Make Impact Investing Mainstream

Impact investing will likely become a mainstream investment strategy as millennials attain more wealth, according to a Fidelity Charitable study that found that 61% of millennial investors already practice impact investing, compared with only one-third of all investors. “We find that investors are increasingly interested in aligning their investments with their broader values and desire for social change,” Scott Nance, vice president of impact investing at Fidelity Charitable, said in a statement. “And the trend toward values-based investing will only...

Nigeria. Pension funds now N13.88tn, 61% invested in bonds, T-bills – Report

Total assets under the Contributory Pension Scheme rose by N460bn in three months to N13.88tn in March, according to figures from the National Pension Commission released on Friday. This was contained in the National Pension Commission’s latest report titled, ‘Unaudited report on pension funds industry portfolio for the period ended 31 March 2022; Approved Existing Schemes, Closed Pension Fund Administrators and RSA funds (Including unremitted contributions @CBN & legacy funds).’ The funds, which ended December 31, 2021, at N13.42tn, rose to...

April 2022

US. Companies Look to Diversify Their Pension Investments as Funding Levels Soar

Companies are looking for alternative investment options for their pension plan funds—for example, high-quality private credit—as they look to diversify their holdings amid high funding levels. Businesses in recent years have invested a greater proportion of their plans in fixed-income securities, which are considered safer bets than assets such as equities, commodities, private equity and real estate. S&P 1500 companies invested 51% of their plan funds in fixed income in 2021, up from 50% a year earlier and 42% a...

Global Pension Finance Watch: First quarter 2022

By Nathan Pavlik & David Finn The sharp increase in discount rates drove positive first quarter pension index results for all regions. Asset returns were negative for all regions except Brazil for the quarter which partially offset the liability gains. Inflationary impact were most pronounced in the UK where plans provide annual pension increases based in inflationary indicators. The overall impact of these changes resulted in positive pension index returns for all markets during the first quarter. While it is always...

Q1 Was a Bad Quarter for Pension Investors, Says Willis Towers Watson Report

Pensions around the world had a rough first quarter, according to a new Willis Towers Watson report. The report lists the average returns and liability increases of Brazil, Canada, the Eurozone, Japan, Switzerland, the U.K., and the U.S. U.K. pensions took the biggest hit in Q1, with an average negative investment return of 9.9%. Discount rate benchmarks increased this quarter in all regions. Brazil has the highest average discount rate of 9.87%, followed by the U.S. and Canada with 3.93%...

US. New York City Wants to Amp Up Risk in Workers’ Pensions

New York City’s comptroller is the latest public official trying to change laws aimed at limiting risk in pension investments, as U.S. state and local pension funds try to plug shortfalls in a low-return environment. Comptroller Brad Lander, who oversees about $260 billion in retirement money for city police, firefighters, teachers and other public workers, is asking New York lawmakers for more flexibility to invest in private markets, high-yield debt and foreign stocks. The state comptroller’s office, which supervises another...

French President Macron’s re-election is muted good news for markets

French President Emmanuel Macron's re-election victory Sunday should see financial markets "breathe a collective sigh of relief," but Russia's invasion of Ukraine has not erased concerns in Europe, said Seema Shah, chief strategist with Principal Global Investors. Having Mr. Macron serve another term "is good news for the euro, French bond spreads and the share prices of French banks, (but) it is hard to see much upside for these assets in the near term given the broader macro outlook in...

US. Fidelity Pension Plan Will Allow Employees to Invest in Bitcoin

Fidelity Investments, the United States’ biggest provider of 401(k) pension plans, will let participants choose to keep money in bitcoin (BTC), but only if their employers let them. 401(k) plans are employer-sponsored defined-contribution pension accounts, and Fidelity, per 2020 figures compiled by the researcher Cerulli Associates, has USD 2.4 trillion locked into 401(k) accounts. That figure, the New York Times pointed out, represents over a third of the domestic market. On its website, Fidelity explained that its “new proprietary offering” was...

UK. Aegon investing £3bn in BlackRock ESG range

Aegon is investing £3bn of its default funds into a range of ESG index funds launched by BlackRock. The firms worked together on the iShares range, which includes six ESG equity income index funds which track Morningstar’s regional and country-specific indices. The change means that ESG exposure in the Aegon workplace default fund will double to 60 per cent for investors in the growth stage of their retirement savings, and to 40 per cent for those in retirement. A number of other...

US. Amazon faces new activism from pension funds in New York over worker safety

A group of New York city and state pension funds that collectively own more than $5 billion of Amazon.com Inc. stock are urging fellow shareholders to vote against re-election of two board members for what the institutions say are failures to adequately protect worker safety. New York City’s pension fund, which represents the teachers, police department, fire department and other unions, has paired up with New York state’s pension fund and the office of the Illinois state treasurer to vote...