UK - Pensions schemes are being urged to make more use of cash as a short-term investment.
Specialists point out that in the last six months the FTSE All Share Index has declined by 11.8% while cash has risen by 1.5%.
Record Currency Management sales and marketing director Leslie Hill said: “I have heard and seen some equity managers looking at including cash in their asset allocation. If they put about 10% of their money into cash it could be a good alternative.”
Investec Asset Management UK institutional business development executive Henry Buckmaster added: “Equities and cash are two different types of investment.
“One is a very secure income generating option with the other being very volatile at the moment.
“The prospects for cash are very good as there is a certainty about getting a return based on current interest rates.”
But Hewitt Bacon & Woodrow investment policy chief Kerrin Rosenberg warned that over the long term cash was the worst performing of all asset classes.
He said the only safe way to “invest” in cash was to take a short-term view of the stock market going down and then to back that judgement by going into cash.
Tim Sharp warns the DWP's plans for collective DC risk establishing an inhospitable environment for the lay trustee
This week's edition of Professional Pensions is out now.
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.