Banking and insurance companies have perpetual time horizons. Strategically, their goal is to maximize net present value to capital holders; tactically, this may be achieved by liability-driven investing (LDI) over intermediate and shorter horizons. LDI investing involves first focusing on…

Pension Funds Asset allocations for pension funds show very large differences by country. In the same vein, asset allocations of pension funds within a country are often characterized by large differences. There are many factors that contribute to these inter-…

Pension Investment Objectives To meet pension liabilities, defined benefit plans need to mix investment returns with contributions. The long-term return on pension plan assets must exceed the discount rate typically used by actuaries to value pension liabilities. Defined contribution pension…

The Investment Policy Statement is the governing document for managers working with institutional investors, just as it is with individual investors. The IPS outlines the goals and objectives of the institution and serves as a guide that predetermines how the…

Defined benefit plans are giving way to defined contribution plans. However, in some countries, such as Japan and the Netherlands, they are still featured prominently. This Los reviews the main factors that contribute to the risk of a DB plan….

It is important for financial institutions to be highly regulated because they have a direct impact on the non-financial sector of the economy. As a result, when large financial institutions fail, it can ripple through the economy, causing unemployment, lack…

Pension funds are vehicles that assist workers in saving for retirement. There are two types of pension plans: defined benefit, in which a plan sponsor agrees (legally) to pay a specified retirement benefit, and defined contribution, in which contributions are…

The Investment Policy Statement is the governing document for managers working with institutional investors, just as it is with individual investors. The IPS outlines the goals and objectives of the institution and serves as a guide that predetermines how the…

Institutions include corporations, trusts, or other legal entities that invest on behalf of groups or individuals, including both current and future generations. Institutional investors carry considerable influence over the capital markets due to their size, scope, and structure. This reading…

Mass Affluent Segment The Mass Affluent segment is the largest among the three segments defined here. Clients in this segment have smaller portfolios comparatively, and are typically more focused on financial planning. This could include budgeting, tax preparation, retirement planning,…