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The world's largest retirement funds

Thriving equity markets, diversification cited by most for double-digit growth

Bob Collie sees shifts in society and the political landscape plus advances in technology all as challenges facing the top retirement funds today.

The latest survey of the world's 300 largest retirement funds found a common set of concerns among plan executives.

The survey, conducted and collated by Pensions & Investments and the Thinking Ahead Institute, also examined the annual reports of the top 20 funds, which represented 41.1% of a total $18.1 trillion in assets included in the overall body of work.

Of the top 20, 15 funds published annual reports in English on their websites in 2017. Among the funds, 10 said solid investment returns were largely driven by strong equity performance, while 13 funds highlighted the importance of diversification as a key strategy for investment performance.

When outlining external impacts on their funds, eight stated that returns were affected by continued low interest rates despite hikes in the U.S. Eight funds said geopolitical tensions were an important element affecting returns; and reports of five funds said they were concerned about aging populations and increasing life expectancy, and the potential threats these bring to the sustainability of their plans.

Further, nine funds highlighted a recovery in global economic growth in the past year as an influential factor in their performance.

"The bigger picture around a lot of the quotes is that the period of time we're going through now is one of rapid change," said Bob Collie, London-based head of research for the Thinking Ahead Group, the executive team to Willis Towers Watson Investments' Thinking Ahead Institute.

"What to us is very significant at the moment is you have this confluence of a number of major trends: the social change, political change, technological change. These are not independent — they interact and between them create an unusual and particularly demanding set of circumstances," Mr. Collie said.