An article in the FT yesterday entitled “Pension funds target ‘unrealistically’ high returns” summarises analysis prepared by Create Research of 190 pension schemes with combined assets of €1.9 trillion.
A rash of fears have overtaken markets. Over the past four weeks, the VIX (volatility index - aka “the fear index”) has risen 86% whilst global equities have slumped 7.6%
In an announcement last week, CalPERS called an end to its $4 billion hedge fund portfolio, citing scale, complexity and cost as key rationale for shutting down a program that has been in place for twelve years.
There is an optical illusion known as The Spinning Dancer in which a female dancer continuously pirouettes. Some people will see the dancer spinning clockwise (with her left foot on the ground) while others will interpret her as spinning anti-clockwise
There has been a growing chorus of investors and pundits decrying bubbles in nearly every major asset class - rates, credit, equities, and even (once more) property.
An article in yesterday’s Financial Times, entitled “’150 people’ will control UK funds”, underscores what has been common knowledge for some time - that the investment consulting industry has become increasingly concentrated.
Since Gatemore’s inception nine years ago, we have been advocates of using ETFs (exchange-traded funds) and other low cost options in traditional asset classes such as developed market equities, core fixed income and even some emerging markets.
As evangelists of diversification, Gatemore has long allocated to commodities. We believe the asset class can offer uncorrelated returns while acting as a hedge against inflation.
Chinese equity investors have had a torrid year. Over the past twelve months, moderating GDP growth, continued fears over a credit “bubble,” and the beginnings of a bond market correction have driven Chinese markets down 9%.
Since the Chancellor’s budget came out last week, there has been much in the press on the imminent decline of annuity providers. In fact, over the past two weeks we have seen stock prices of the pure-play annuity providers get cut in half or more.