Pension Pulse

Lu Wang of Bloomberg reports, The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere : The idea behind asset allocation is simple: when one market struggles, it’s OK because an investor can jump into another that is thriving. Not so in 2015. In fact, if you judge the past year by which U.S. investment class generated the largest return, a case can be made it was the worst for asset-allocating bulls in almost 80 years , according to data compiled by Bianco Research LLC and Bloomberg. With three days left, the Standard & Poor’s 500 Index has gained 2.2 percent with dividends, cash is up less, while bonds and commodities are showing losses (click on image below). After embracing everything from Treasuries to high-yield bonds and technology shares amid seven years of zero-percent interest rates, investors found themselves with nowhere to run at a time when the Federal Reserve’s campaign of stimulus drew to an end. Normally it isn’t like this. Since 1995, practically every...

Leah Schnurr and Randall Palmer of Reuters report, Ministers eye no action on Canada Pension Plan premium : Canada's federal and provincial financial ministers are considering not raising premiums for the Canada Pension Plan (CPP), federal Liberal Finance Minister Bill Morneau said on Monday, despite a Liberal campaign promise to enhance the plan. The ministers will be considering a range of options over the coming year "from doing nothing because of the economy to more significant changes," Morneau told reporters after meeting with his provincial counterparts. The Liberals, elected in October, campaigned on expanding the CPP, but the Canadian Federation of Independent Business warned that a premium increase would boost unemployment, because it does not take profit into account. The CPP is comparable to the U.S. Social Security program. The minister said the province of Ontario, which has talked about starting an Ontario pension plan because peopl...

Watching that awkward moment at the end of Miss Universe 2015 on Sunday evening got me thinking about the biggest pension gaffe of the year. Earlier this month, Adam Mayers of the Toronto Star reported, $10,000 TFSA limit gone to help fund tax cut: Friday’s Throne Speech didn’t mention Tax Free Savings Accounts (TFSAs), but federal Finance Minister Bill Morneau didn’t leave us in suspense for long. On Monday afternoon, as part of measures to help pay for a middle-class tax cut, Morneau — cheerfully and in a brisk boardroom manner — said the $10,000 annual limit introduced by Conservative Finance Minister Joe Oliver is gone. The good news is that the $10,000 amount stands for this year and goes into your lifetime total. But as of Jan. 1, it’s back to the future for this popular savings vehicle, dubbed the Totally Fantastic Savings Account by Wealthy Barber David Chilton. It reverts to $5,500 a year. The Liberals argued during the election that the higher limit only benefits ...

Nishant Kumar of Bloomberg reports, Hedge Funds Just Had Their Worst Quarter Since the Crisis : Hedge fund closures surged in the three months to the end of September as money managers reeled from declines in commodity and equity markets, while high-yield credit spreads widened. The number of funds liquidated climbed to 257, up from 200 in the previous three months, according to a report from Hedge Fund Research Inc. on Friday, and taking total closures in the first nine months to 674, compared with 661 during the same period last year. Cargill Inc. ’s Black River Asset Management shut four units, while Armajaro Asset Management LLP also closed one of its funds. Liquidations rose “as investor risk tolerance fell sharply, and energy commodities and equities posted sharp declines, resulting in net capital outflows, wider performance dispersion and meaningful differentiation between hedge funds,” Kenneth Heinz, president of HFR, said in a statement. The HFRI Fund Weig...

All ison Lampert of Reuters reports, Canadian pension fund PSP eyes energy sector amid oil slump : The Public Sector Pension Investment Board, one of Canada's 10 largest pension fund managers, is considering entering the oil and gas sector, as weak crude prices create opportunities for long-term investors, said Chief Executive Andre Bourbonnais. "It's one asset class we're looking into," Bourbonnais told media in Montreal on Tuesday. "We do not currently have the internal expertise really, so we're trying to look at how we're going to build it first." Last week, the head of Healthcare of Ontario Pension Plan (HOOPP) expressed a similar sentiment, stating the prolonged weakness in energy prices is making valuations in the oil and gas attractive and revealed HOOPP is considering upping its investments in Canadian equities in response. The interest mirrors that of larger Canadian pension funds such as Canada Pension Plan Inv...