UK - Interest rate uncertainty is prompting schemes and other institutional investors to "neutralise" the economic sensitivity of their portfolios, State Street Global Markets claims.
It said that institutional investors – particularly in the US – were unwilling to take strong positions on which way interest rates would go and were buying both cyclical and defensive stocks.
Global head of equity Peter Sullivan said investors were selling consumer cyclicals and buying technology, banking and insurance sector stocks. Additionally, they were selling Asian equities and acquiring defensive stocks in the US.
“In the face of uncertainty about the pace of interest rate increases, institutional investors are neutralising the economic sensitivity of their portfolios.”
A buyout tool which provides schemes with up-to-date pricing and comparisons between insurers has been launched by JLT Employee Benefits.
The DB white paper sets out plans to review the funding regime, with 'prudent' and 'appropriate' possibly redefined. But James Phillips asks if this could this signal a return to an MFR-like approach?
The trustees of GKN's pension schemes have agreed a package of mitigation measures that would improve funding to a "more prudent level" if Melrose's offer is accepted by shareholders next week.
While the new powers are welcome, most respondents doubt it will make a difference to the outcomes for members, Pensions Buzz respondents say.