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The Weekly Wrap: June 7 edition

By Lisa Botter | June 7, 2013

A round-up of the pensions industry stories published across the FT Group – from Japan's call for pension schemes to increase exposure to local equities, to the rebound in annuity rates.

Abe to press pension funds to invest more in Japanese stocks

Week in numbers 

  • 15% target allocation to emerging markets
  • $3.6bn issuance of catastrophe bonds in 2013
  • 3% increase in annuity rates

FT: Japanese pension schemes have been called upon to increase allocations to domestic stocks as part of economic stimulus measures. Shinzo Abe has also urged national schemes to exercise their voting rights more frequently.

‘Triple exposure to frontier markets’

FTfm: Institutional investors haven been urged to increase allocations to emerging and frontier markets. Pascal Duval, chief executive Emea of Russell Investments, has advised that pension funds triple their exposure to frontier markets and increase emerging market exposure from 10 to 15 per cent to boost returns.    

Catastrophe bonds prove anything but a disaster

FTfm: Issuance of catastrophe bonds has reached $3.6bn (£2.3bn) so far this year, which is on course to beat 2012’s, according to reinsurer Swiss Re. There is growing interest from pension schemes for the asset class due to low default rates and perceived lack of correlation.

Hope in retirement as annuity rates rebound

FT: A rise in annuity rates since the beginning of the year has bolstered the value of pension savings for those approaching retirement. Favourable economic conditions have seen annuity rates rise by more than 3 per cent. 

Private equity proves popular despite misgivings

MandateWire: Pension schemes have turned to private equity to gain much needed return and to plug funding gaps. The increase in interest in the asset class has forced managers to make costs more palatable for trustees.

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This week's social media comment

In response to our feature on the benefits of long infrastructure debt for schemes Redington's Dan Mikulskis reiterated the argument that asset class can garner a 3 per cent premium over gilts:

 
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