Table of Contents
Issue Date: Monday, November 28, 2016
The stakes are high as the CalPERS board debates whether to significantly decrease the nation's largest public pension fund's assumed rate of return, a move that could hamstring the budgets of contributing municipalities as well as prompt other public funds across the country to follow suit.
Event-driven managers are taking it on the chin, racking up net outflows of $38 billion so far this year, the largest among all hedge fund strategy categories.
The defined contribution plans sponsored by companies bearing the name of President-elect Donald J. Trump are outliers from the norm when it comes to their largest allocations.
Defined contribution executives are wrestling with a 401(k) plan strategy whose theme is best described by the band The Clash: “Should I Stay or Should I Go?”
More than the idea that active management seems to be turning a corner, sources say, it might be that passive management has had its day.
President-elect Donald J. Trump's campaign pledge to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act might have struck a chord among voters, but the politics of repealing or replacing it won't be simple.
The tide might be turning for active managers, as dispersion creeps back into global stock markets and investors realize their long-term return assumptions just won't cut it going forward.
Japan's economy might be treading water, but the country remains a vibrant growth market for global money managers as local banks, insurers and pension funds move to plug holes in their portfolios left by scant-to-negative yields on Japanese government bonds.
Discounts to the alternatives secondary market have disappeared, and prices remain higher in the face of upcoming European elections as well as the aftermath of the election of Donald J. Trump and Britain's vote to withdraw from the European Union.
Cybersecurity rules for the U.S. banking industry could eventually be extended to money managers, sources said.
With the upcoming Dutch general elections in March and increased responsibilities set to land at providers' doors, firms such as APG Group are working hard to prepare for changes at the heart of their retirement system.
Institutional investors are using real estate as yet another proxy to bonds, to effectively manage volatility and protect against rising inflation. In Europe and the U.K. particularly, real estate allocations remain on the rise.
Yields on 10-year U.S. Treasuries hit a 2016 high in the days following the U.S. presidential election, but asset owners won't be boosting bond allocations just yet. Their reasoning: It's unclear whether higher yields are here to stay.
From Brexit to the U.S. election, traders and investors alike turned to single-country ETFs to express their views on how campaign rhetoric might translate into policy.
The likeliest vehicle for starting the reform conversation is the proposed Financial Choice Act bill introduced in June by House Financial Services Committee Chairman Jeb Hensarling, R-Texas.
Investment consultants face challenges as bearers of bad news in assisting asset-owner clients grappling with lower capital market expectations that are pushing them to extend risk exposures to reach assumed returns.
Some in the institutional investment community might have a meltdown over prospects of the Trump administration dismantling the Dodd-Frank Wall Street Reform and Consumer Protection Act, but they should calm down.
Last April the Department of Labor finalized its massive fiduciary conflict of interest rule, restricting severely the ability of financial institutions to compensate employees who are providing advice to retirement plan and individual retirement account participants.
If we look past the market's most recent fixation on the possibility of fiscal stimulus, there's little to distinguish today's environment of sluggish growth and pedestrian returns from the similarly predictable rhythm of the past few years.