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

Don't have an account? Register for Free Unlimited Access