Money Management Intelligence

Poll Archive

Recent reports claim investments in hedge funds, private equity and real estate have not outperformed equities or bonds in the last 10 years. At the same time, funds are increasingly looking at these asset classes as a means to increase returns. Are the purported benefits of alternatives investing a red herring?

No. Alternatives are meant as a diversification tool as well as an alpha generator. They are vital for a modern portfolio. 0%
Yes. Alternatives are correlated to the broader market so it makes no difference whether they’re in the portfolio or not. 50%
I’m not sure. 50%

Interest in risk parity portfolio modeling is increasing as plan sponsors search for a way to balance risk exposure more evenly between asset classes. But few investors have considered or implemented a risk-parity strategy at the total fund level for fear that such a strategy presents a risk that the bond portfolio could become just another risky asset. The open question: is risk parity too risky for a total fund approach?

Yes 0%
No 33%
It’s a fund-specific question 67%

As pension funds continue their urgent quest for investments with lower risk, lower fees and better returns, do you expect to see more deals in which institutions invest in hedge funds or private equity firms, or co-invest with them on specific opportunities?

Yes, this is a trend that will grow. 50%
No, this kind of activity will remain flat and an exception. 50%
No, this investment strategy will decline. 0%

At a recent industry conference, a panel of public plan sponsors hit back at their critics, rejecting the popular notion among policymakers that public DB plans are broken and in need of reform, and lamenting the inordinate amount of time they must now spend conducting damage control from pension reform group. Are the plan sponsors’ complaints on point?

Yes. Many public pension plans are underfunded, but not fundamentally broken. 50%
No. Public pension plans are poorly structured and administered and ripe for reform. 0%
Yes and No. The condition of public pension plans is so disparate that they must be evaluated on a case-by-case basis. 50%

As pension funds continue to push into high yield even though yields have dropped as prices have risen significantly since December, a question has arisen among managers and consultants: is there value still to be found in the class?

Yes, there are still some short-term gains to be had. 80%
Yes, but now only as a long-term play. 0%
No. Too late, that horse has bolted. 20%

Defined contribution plan consultants say current lifetime income options are falling short on a number of fronts, i.e. high, complicated and opaque fees, inflexibility, and limited transferability among record keepers. They note that once these problems are solved there will be great demand among sponsors for these products. Do you agree?

Yes, I agree there is a big market waiting. 100%
Yes, but I believe there will only ever be marginal demand for these products. 0%
No, I don’t agree. I’ve seen/heard nothing in the market indicating pent up demand. 0%

Over the last year or two pension plans have been lowering their assumed rates of return--sometimes grudgingly—in response to a continuing low interest rate environment. Given that the Federal Reserve has now made it clear that it intends to keep interest rates low for at least the next two years, what in your opinion is an appropriate average assumed rate of return pensions funds should adopt?

More than 8% 0%
6% - 8% 50%
4% - 6% 50%
2% - 4% 0%
Less than 2% 0%

U.S. pension funds lag their Canadian and European counterparts regarding infrastructure investment. As more domestic funds seek returns in uncorrelated assets, will infrastructure investing finally catch on with them?

Yes. We’re looking at a low-return environment for the foreseeable future and infrastructure could provide long-term stable returns. 33%
No. The costs associated with investment are far too steep compared to other real assets. 17%
I’m unsure. 50%

Do defined contribution plan sponsors need more education about general fee matters, including revenue-sharing funds and administrative fees?

Yes, plan sponsors generally need to know more about what types of administrative fees are applied to their funds, and how revenue sharing funds work. 50%
No, plan sponsors generally have a strong grasp on fee issues. 0%
It’s hard to say because plan sponsors’ knowledge of fee issues is all over the map. 50%

With the funding shortfall for U.S. corporate pension plans continuing unabated—according to several reports issued over the last week funding levels in 2011 were in the a high 70% range at best--what remedies do you expect corporations will take in 2012?

Corporations will make greater pension contributions from their cash this year in order to bridge the funding gap. 50%
Corporations will issue corporate bonds to help fund their pension plans, taking advantage of low interest rates. 0%
More corporations will simply give up on their DB plans and fold them in favor of DC plans. 50%

With the funding shortfall for U.S. corporate pension plans continuing unabated—according to several reports issued over the last week funding levels in 2011 were in the a high 70% range at best--what remedies do you expect corporations will take in 2012?

Corporations will make greater pension contributions from their cash this year in order to bridge the funding gap. 0%
Corporations will issue corporate bonds to help fund their pension plans, taking advantage of low interest rates. 0%
More corporations will simply give up on their DB plans and fold them in favor of DC plans. 0%

Is it your perception that analysts and ratings agencies are bringing a higher level of scrutiny in their analysis of corporate pension fund liabilities as a gauge of company health as a result of widespread concern about pension fund underfunding?

Yes, of course they are. 0%
No, it is my perception that their level of scrutiny has not changed. 50%
I’m not sure. 50%

Is the European sovereign debt crisis interfering with institutions’ ability to make investment decisions?

Yes. Investors are waiting for the dust to settle. 50%
No. They’re getting into the European market and hoping for the best. 0%
Kind of. They’re moving around money, just not into Europe. 50%

Is the failure of the Congressional special deficit-cutting supercommittee to agree on a deficit reduction plan a harbinger of continued market weakness for the foreseeable future?

Yes. The supercommitee’s failure just feeds into the current widespread malaise of uncertainty regarding U.S. economy. 25%
No, investors have now largely discounted their disappointment with the supercommittee’s failure. 75%
I’m not sure. 0%

In the face of the U.S. Federal Reserve’s recent forecast of low inflation in the U.S. for years to come, what should investors’ position be on inflation risk and investment strategies?

With low inflation in the offing, inflation risk strategies are pointless and a drag on returns, so dump them. 0%
Inflation will rise again eventually, so investors should stick with their inflation-mitigating strategies and investments. 33%
I’m not sure. 67%

Will emerging markets continue to be a viable, long-term solution for strong returns among plan sponsors?

Yes. A rising tide lifts all boats. 68%
No. The fundamentals that drove emerging markets’ expansion have been eclipsed by continued strife in developed markets 21%
I’m unsure. It’s too difficult to tell at this time. 12%

Insurance companies are angling for “buy-ins” of U.S. corporate defined benefit plans, which guarantee payments to pensioners in exchange for taking over plan assets. This is already an approximately $40 billion industry in the U.K. Will it catch on in the U.S.?

Absolutely. I’ve seen the future and it works 33%
Not at all. It would never work here 0%
Maybe some plans would participate, but it won’t be widespread 67%

Would LDI strategies have been a better play 10 years ago than now?

Yes. All defined benefit plans would have been fully funded by 2015 if everyone had been early adopters. 80%
There is still value in LDI strategies today. 20%
LDI is bunk at any time--we’re not going to miss out on cheap assets. 0%

Is the growing provision of discretionary consulting services by consultants a value-add to the pension industry?

Yes—It’s a service that implies better investment by and administration of institutional funds 64%
No—It‘s a service riddled with conflicts that pose risks to investors 9%
I’m uncertain 27%

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Poll Archive

As pension funds continue their urgent quest for investments with lower risk, lower fees and better returns, do you expect to see more deals in which institutions invest in hedge funds or private equity firms, or co-invest with them on specific opportunities?

As pension funds continue to push into high yield even though yields have dropped as prices have risen significantly since December, a question has arisen among managers and consultants: is there value still to be found in the class?

U.S. pension funds lag their Canadian and European counterparts regarding infrastructure investment. As more domestic funds seek returns in uncorrelated assets, will infrastructure investing finally catch on with them?

Do defined contribution plan sponsors need more education about general fee matters, including revenue-sharing funds and administrative fees?

With the funding shortfall for U.S. corporate pension plans continuing unabated—according to several reports issued over the last week funding levels in 2011 were in the a high 70% range at best--what remedies do you expect corporations will take in 2012?

With the funding shortfall for U.S. corporate pension plans continuing unabated—according to several reports issued over the last week funding levels in 2011 were in the a high 70% range at best--what remedies do you expect corporations will take in 2012?

Is it your perception that analysts and ratings agencies are bringing a higher level of scrutiny in their analysis of corporate pension fund liabilities as a gauge of company health as a result of widespread concern about pension fund underfunding?

Is the European sovereign debt crisis interfering with institutions’ ability to make investment decisions?

Is the failure of the Congressional special deficit-cutting supercommittee to agree on a deficit reduction plan a harbinger of continued market weakness for the foreseeable future?

In the face of the U.S. Federal Reserve’s recent forecast of low inflation in the U.S. for years to come, what should investors’ position be on inflation risk and investment strategies?

Will emerging markets continue to be a viable, long-term solution for strong returns among plan sponsors?

Insurance companies are angling for “buy-ins” of U.S. corporate defined benefit plans, which guarantee payments to pensioners in exchange for taking over plan assets. This is already an approximately $40 billion industry in the U.K. Will it catch on in the U.S.?

Would LDI strategies have been a better play 10 years ago than now?

Is the growing provision of discretionary consulting services by consultants a value-add to the pension industry?

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Not Registered? Get it now!

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