Pension Pulse

Michael Santoli of CNBC reports the traditional retirement portfolio of stocks and bonds is down 20% for only the fourth time since WWII:
The coronavirus crisis has punished the blameless across the world this year. That includes investors who did the supposed “right thing,” by keeping a balanced portfolio to fund long-term gains, just as the experts advise.

As the stock-market cascaded to its recent lows this month, the traditional portfolio of 60% stocks and 40% bonds suffered a greater than 20% decline from its peak value, for only the fourth time since World War II.

At last Monday’s low, this standard retirement allocation, as represented by the Vanguard Balanced Index Fund, was 22% off its peak Feb. 19 value – driven mostly of course by the 30% tumble in equity indexes that bonds only partially buffered. In fact, near the worst of the stock sell-off bonds were not offsetting the losses by rallying, as everything but cash was liquidated.


Upon request, Ritholtz Wealth Management res…

Zane Schwartz of The Logic reports Canada’s 10 biggest pension funds have lost an estimated $104 billion in public equity amid market chaos:
When the S&P 500 closed at a record high on February 19, Canada’s major pension plans, with more than a quarter of their investments in stocks, were in a comfortable position in spite of the looming coronavirus pandemic.

Five weeks later, Canada’s 10 largest pension funds — upon which millions of Canadians are relying for retirement—have lost an estimated $104 billion, according to an analysis by The Logic.

But not all pensions are created equal, and while some—including the country’s largest, the Canada Pension Plan Investment Board (CPPIB)—have high exposure to public markets, others have managed to mostly skirt the crash that has seen the S&P 500 lose roughly US$8 trillion this year.

Canada’s 10 largest pension funds have an average of 27 per cent of their assets invested in the public markets, based on an analysis of each firm’s disclo…