Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, commented: “At a time when pension schemes face increasing deficits and low returns our new Made Simple Guides offer straight-forward explanations on investment options which may help navigate the current low return environment – helping them to get the best return for their scheme. We greatly appreciate the time, effort and knowledge that BlackRock, iShares and Acadian have put into the creation of these Made Simple Guides – they will be a great help to our members.”
GENERATING INCOME FROM PRIVATE MARKETS MADE SIMPLE GUIDE
Andrew Stephens, Managing Director at BlackRock, commented: “In today’s compressed return environment, a growing number of pension schemes are looking to generate additional yield by investing in private market assets. We believe this is the right response, and we would encourage trustees to get more familiar with these asset classes. This guide has been written with that aim in mind, discussing the different sources of alternative income and the practical aspects trustees should be aware of. It should be a useful tool to initiate discussions both within the trustee board and with advisers and managers. We are very pleased to be able to help start those discussions by creating this guide in partnership with the PLSA.”
EXCHANGE TRADED FUNDS MADE SIMPLE GUIDE
Ashley Fagan, head of iShares UK institutional client business, said: “In today’s increasingly challenging world, many pension schemes are reviewing the products they hold to ensure they get the best value for money for their members. Index investment vehicles, including exchange-traded funds (ETFs), are increasing in popularity.
"Pension funds and consultants are now using ETFs because of the transparent and cost-effective access that ETFs can offer to a broad range of asset classes including alternatives, such as property and commodities, as well as an extensive range of equity and fixed income exposures. We believe that pension schemes and their stakeholders could benefit from exploring how the index investing landscape has evolved and the potential opportunities this presents.
"Within this Made Simple Guide, we have put forward a framework to help trustees evaluate ETFs versus other products by outlining key characteristics and benefits. We hope this will help trustees in discussions with scheme advisers on what instruments to use to best fulfil their investment objectives.”
LOW VOLATILITY INVESTING MADE SIMPLE GUIDE
Oliver Close, Director of UCITS Funds of Acadian, said: “This Made Simple Guide aims to explain what low volatility investing is. We’ve looked at the practical implementation considerations of this approach, and how it can fit within both DB and DC pension portfolios. We believe low-volatility equity strategies are a good fit for a DC pension plan throughout both a member’s savings journey and retirement. They are also appropriate for DB schemes’ equity allocations, giving access to assets which deliver higher than average returns necessary for offsetting longevity risk, and for preserving some allocation to assets that are not expected to underperform when inflation is high. We are delighted to have partnered with the PLSA to create this Made Simple Guide, which we hope schemes will find helpful, especially in the current, challenging economic environment.”
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