Global outlook, take an active role in pension de-risking, and US & India versus the world

Alister Sneddon, CTO

Here are the top 3 insights for June 5th, prepared by Alister, our CTO.

Today’s Brief

  • Nuveen: Global Investment Committee Outlook — 2Q 2019 update
  • Columbia Threadneedle: Take a more active role in pension de-risking
  • Blackstone: Joe Zidle — US and India versus the World

Global Investment Committee Outlook: 2Q 2019 update

  • Nuveen’s 2019 Outlook, published in early December, told investors to expect a tougher climb.
  • Since then, we’ve experienced a selloff in stocks and other risk assets followed by a strong recovery in the first quarter.
  • That might have been even a tougher climb than we envisioned, but the sort of volatility and uncertainty that investors experienced over the past few months is, unfortunately, pretty typical in the late stages of economic and market cycles.
  • And it’s a reminder of why we encourage our clients to remain invested through times of volatility.
  • Even so, we think we’re in for a challenging environment for the rest of 2019.

Genuine Scores for the top 3 Globally focused Mixed Asset funds

  • SEI Multi-Asset Income Fund, 93
  • DFA Global Allocation 25/75 Portfolio, 87
  • BlackRock LifePath Index Retirement Fund, 84

Take a more active role in pension de-risking

  • In 2012, General Motors, Ford and Verizon kicked off a new dimension in reducing corporate pension liability.
  • Under the term pension de-risking, they used two new strategies to reduce the number of participants and lessen pension liability: lump sum windows and pension risk transfers.
  • Thousands of employees either accepted a lump sum offer or were transferred to an insurance carrier through a pension risk transfer (sometimes referred to as a buyout).
  • Since then, there’s been a steady stream of pension de-risking actions by mid- to large-size corporations, and it’s no longer a question of if, but when will pension de-risking affect you.
  • Financial advisors and investors who participate in private sector plans should prepare ahead of a possible event and be aware of three recent corporate actions that could provide insights into what lies ahead in 2019.

Genuine Scores for top 3 Equity funds

  • Versus Capital Multi-Manager Real Estate, 99
  • Fidelity Advisor Series Growth Opportunities Fund, 97
  • Fidelity Series Real Estate Income Fund, 97

Joe Zidle: US and India versus the World

  • This year’s rally in risk assets caught many off guard.
  • Investors have been net sellers, preferring defensive assets when they do deploy capital.
  • Yet since the fourth quarter market decline, the S&P 500 has increased 20% and credit spreads have narrowed, delivering a 8% gain for high yield investors.
  • In part, the snapback can be attributed to a recovery from that fourth quarter drawdown, as well as good news on China trade and a more dovish Fed.

Genuine Scores for the top 3 Indian focused funds

  • iShares India 50 ETF, 49
  • First State Indian Subcontinent, 47
  • Nomura Funds Ireland-India Equity, 46

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All the best,
Alister and the Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 16th of April