The problem of div

While equities normally form the bulk of a pension fund, alternatives add diversification. However, a multi-asset approach requires an adaptable strategy and thorough analysis to achieve the right mix

Pension schemes have traditionally concentrated on stock markets to achieve capital growth. And while equities outperform corporate and government bonds in economic upswings, this focus has faced some real challenges, particularly over the last decade. In fact, the equity losses during the 2000-2003 bear market had a dramatic effect on the closure of many defined benefit schemes, especially as it coincided with interest rates being cut, which widened the gap between asset values and liabilities. While equities usually form the bulk of pension pots, schemes also allocate to other assets to...