UK - Funding levels at schemes would be 17% higher if they had adopted strategies to manage downside risk in 1999, a new report claims.
And it warns that a quarter of underfunded schemes risk more than a 10% drop in value over the next three years if they maintain static equity exposure.
Axa Investment Managers’ Strategies with Upside report – carried out by financial sector risk consultancy Barrie & Hibbert – says the drop will apply to a typical plan which has 60% invested in equities.
The report says marginally underfunded schemes should make use of strategies designed to manage downside risk – such as “dynamic contingent immunisation” and “portable alpha”.
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