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.

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