UK - Trustees should assess their statement of investment principles (SIP) and be prepared to make changes to their portfolio to remain compliant with policy, Buck Consultants says.
Buck Consultants head of pensions and investment Steven White said: "In the current situation one of two actions is advisable, [to either] commence the process of rebalancing back to the benchmark weighting, by purchasing equities in a measured and planned way or reflect the lower value equity weighting in your SIP."
White explained this would require an agreed change in strategy, along with employer consultation.
He said, in most cases, it would be appropriate to start increasing equity weightings back to benchmark, with stage increases over the next three to six months.
And he noted that it was important to work from up-to-date information on the value of the assets and the split between equities and other asset classes.
White added: "While there is still scope for significant downside in equity markets, they have recently been showing signs of the final stages of a bear market and the authorities are now taking decisive, internationally coordinated action.
"Investors should be aware that equity markets have often shown strong returns during bleak economic conditions, for example, in the mid 1930s and mid 1970s."
Former National Association of Pension Funds (NAPF) chairman and BESTrustees director Peter Thompson agreed and said: "If trustees have gone under their benchmark weighting, they should consider buying equities, however they might find the company may not agree."
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