Pension fund managers should consider managing for a total outcome rather than focusing on the returns of individual strategies or asset classes to respond to the volatility and risk now plaguing their plans, according to a paper recently released by State Street Global Advisors.
According to the research, a plan’s liability stream, not a cap-weighted benchmark, is its true benchmark—a reality that favors implementing a risk-controlled growth portfolio. The research argues that a managed volatility equity strategy that reduces exposure to stocks with high expected volatility can offer stronger risk-adjusted returns than the respective cap-weighted investable universe over the long term.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access