DC plan sponsors are increasingly turning to collective investment trusts instead of mutual funds for their lower costs, flexibility and efficiency. There are key differences in how they’re structured, governed and regulated, and in the types of plans their use is permitted. Industry experts explain why CITs are becoming so popular, how they are evaluated and used, and innovations ahead in investment strategy and usage.
A wide range of institutional investors across the public and private sectors are responding to sustainability as an investment approach in a variety of ways. As climate change and the transition to a net-zero economy are key themes that are driving many strategies focused on risk management and alpha opportunities, sustainability is evolving to incorporate biodiversity and social issues as well, and the data and metrics that support sustainable investment frameworks are becoming ever more sophisticated.
Investment strategies based on stewardship are getting a closer look, as investors embrace the social and governance aspects of ESG investing. Key stewardship criteria include the strength of the company’s financials, the resilience of the franchise, the sustainability positioning of the business and management teams who intend to leave the business in better shape than they found it.
Institutional investors should look beyond the promise of AI to examine their asset managers’ experience, execution and usage of AI for alpha generation. As a quant manager that has long incorporated AI explains, a scientific approach and collaboration between the technology and research teams are essential for delivering the value of AI for asset managers and their institutional clients.
Retirement plan advisers are working closely with plan sponsors to help their defined contribution plan participants achieve financial security. Together, they are assessing new product offerings, asset diversification, savings behavior and regulatory issues. As participants face complex challenges, innovative approaches to automation, personalization, education and portfolio construction are helping to drive positive participant outcomes.