March: In Like a Lion, Out like a Lamb
Pardon the Interruption
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A few weeks ago, we asked the following question to community members: What’s the biggest risk your pension fund is facing this year? Perhaps not so surprisingly, a number of responses highlighted the risk of volatility in the markets or a simultaneous correction in Fixed Income and Equity Markets. So has the start of March marked a high point with volatility? Will the Lion leave us with a Lamb in the form of calmer markets? That remains to be seen.
There was plenty to talk about this month other than the strong return of volatility to markets, with pension funds running into trouble, talk of rate hikes, and of course the latest Brexit woes. Emerging markets, infrastructure, and active investments were all popular topics amongst community members. Some of the most popular discussions include:
- Generating alternative sources of income
- Universal basic income: a solution to pensions?
- Comments from Mark Carney: Time to call time on RPI?
- AE Shake Up: New Eligibility Rules and Change in Contribution Limit
We’re excited with our current rate of community growth (February alone saw 45 new users join mallowstreet) and the level of engagement this month, particularly in the forums, has been very high. I encourage everyone to view the forums (if you haven’t already) to get direct insights into the investment strategies of some of the UK’s largest pension funds (click here to access the discussion).
Top 10 Searches in February
- Risk
- Factor Investing
- Governance
- Real Estate
- GDPR
- Pensions Dashboard
- Carillion
- Covenant
- Defined Contribution
- Due Diligence
It’s no wonder ‘Risk’ is the biggest search term. Many pension funds are concerned that falling markets are consuming the lion’s share of the returns they generated over the past several months. And in times of stress, you often look to your Sponsor to make sure they are strong and intact, especially in the wake of Carillion.
Even with volatile markets and concerns about risk, there is another topic that pension fund trustees continue to highlight to us - ESG / Responsible Investment and Sustainability. This clearly remains high on the list of priorities for pension funds, especially when so much work still needs to be done on creating a common vocabulary for the pension fund industry. If you are working in these areas, please get in touch so I can tell you more about trends we are seeing, and what we’ve got planned.
In the meantime, I wonder if the Proverb: In Like a Lion, Out Like a Lamb, will prove true. Only time will tell.
