Loading...
22nd June 2018
George Cooper helps explain how pension assets should be invested and why recent attempts to ‘de-risk’ pension schemes are causing systemic risks in the pension system as a whole. Bonds, especially long-term bonds, are a much riskier asset for pension investors than real assets like equities and real estate. In periods of high inflation, the revenues derived from bonds, being fixed in nominal terms, can suffer dramatic declines in value with respect to wages and the cost of living. Pension funds are abandoning equities in favour of bonds due to an obsession with minimising the mark-to-market volatility of pension liabilities relative to pension assets. The desire to minimise this risk has led to an almost total disregard for investment returns. If the central banks are successful in their attempts to increase future inflation – and we believe they will eventually succeed – a substantial part of the real value of long-dated bonds will be wiped out.
Risks
The value of your investment may fall or rise and you may get back less than you invested. All investments involve risk and past performance is not a guide to future returns. Equitile offers no guarantee against loss or that investment objectives will be achieved. Please read the Key Investor Information Document, Prospectus and any other offer documents carefully and consult with your own legal, accounting, tax and other advisors in order to independently assess the merits of an investment.
Important Information
The information available on this website is intended for qualified personnel in relevant jurisdictions only and is not intended for use by members of the general public or investors in countries where the Funds referred to are not registered or approved for marketing and/or sale or such jurisdictions where dissemination of information on the Funds or services is not permitted.
Equitile does not offer investment advice. Nothing on this website should be construed as a recommendation to invest in any securities issued by any fund managed by Equitile or as legal, accounting or tax advice.
Equitile Investments Ltd is authorised and regulated by the Financial Conduct Authority in the United Kingdom and is a company registered in England, number: 09459099. Registered Office: 2nd Floor, Regis House, 45 King William Street, London EC4R 9AN.
Copyright 2020 © Equitile, all rights reserved
