Liability-driven investment strategies are struggling to gain ground outside larger schemes, with regulatory data indicating just one in 17 medium-sized plans have implemented hedging strategies.
Schemes are looking towards property for further diversification, having expanded alternative property investments fivefold last year, as experts predict improved economic sentiment and a lack of development sites could stimulate rental growth.
Waltham Forest Pension fund has invested £20.8m in an impact investment fund as it seeks to diversify its returns and support UK-based social capital projects.
Alternative fixed income indices could be the next frontier in smart beta investing for pension schemes, industry experts have said, calling for a shift in focus away from equity strategies.
News analysis: Investment management and consultant fees need to be more transparent to allow schemes to more accurately measure whether they are getting value for money, industry figures have said.
Three local authority pension schemes have revealed their plans to invest in infrastructure collectively, as they look to reduce management costs and diversify their portfolios to protect against market falls.
Data analysis: Schemes ploughed £7.9bn into fixed income assets in the last quarter of 2013, data from the Office for National Statistics showed, as they accelerated derisking plans and diversified fixed income assets.
Demand for insurance-linked securities such as catastrophe bonds has been rising even as yields have been decreasing, as consultants expect Solvency II to increase supply.
Data analysis: The rise of multi-asset funds in defined contribution schemes has fed criticism over whether these strategies are taking a sufficient level of investment risk for 20-somethings with a long-term savings horizon.
Global institutional investor sentiment is moving towards hedge funds as pension schemes look for less volatile equity returns, with larger investors favouring bespoke blended manager mandates.
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