Pension Pulse

Jeff Cox of CNBC reports, Surge in investor cash to stocks triggers fear that rally is near an end : A year during which the market exceeded all expectations ends not with investors backing off but rather with them throwing caution to the wind. The trend was particularly prevalent among those who prefer index funds, as ETFs saw their second-biggest week of inflows ever at $31.4 billion, according to fund flow data from Bank of America Merrill Lynch . Active strategies, as expressed through mutual funds, saw huge outflows, with the $22.7 billion leaving the fourth-worst week on record. However, the difference of $8.7 billion still left the equity side of the ledger with a big week . Speculation continues to build that the bull market is running out of steam , even as the major indexes continue to set records. The Dow industrials are threatening to break 25,000 as 2017 winds to a close, with the index up just shy of 25 percent including Friday's gains as of midday . The bl...

Katherine Chiglinsky and Brandon Kochkodin of Bloomberg report, Fees Rise for Underfunded Pensions : The largest pension plans held by S&P 500 companies face a $348 billion funding gap. As a result, they’re paying higher annual fees to the U.S. Pension Benefit Guaranty Corp. , the government agency that backstops plans. “There’s increased awareness that an underfunded plan imposes risk on employees, it imposes risk on shareholders, and it’s getting more expensive,” says Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School and executive director of the Pension Research Council. The fees, called variable-rate premiums, are set by Congress and meant to encourage companies to set aside more money in their pension funds. They’ve more than tripled in four years for companies including General Electric Co. and Boeing Co. , according to data obtained by Bloomberg News through a Freedom of Information Act request. GE’s fees surged more than sixfold, to ...

Rob Nikolewski of the San Diego Union-Tribune reports, Report says CalPERS investments too focused on environmental and social activism : A pro-business group released a report last week, saying the California Public Employees Retirement System ( CalPERS ) is too concerned about going green than it is about making green. The American Council for Capital Formation (ACCF) said CalPERS board members have overemphasized what are called Environmental, Social and Governance (ESG) investments — and the sluggish returns on those investments are dragging down the pension fund’s bottom line . The 30-page critique said CalPERS’ ESG investments have not been “translating into wins for its pensioners or the taxpayers who bear the burden for covering shortfalls” and “the use of these funds to advance an environmental agenda has plunged the system and California into a building financial crisis.” CalPERS officials fired back, defending the financial stability of the fund and th...

HuffPost Canada reports, Canada Pension Plan Undermines Feds By Investing In Coal : Canada's national pension fund manager is among a group of Canadian companies that are undermining the federal government's international anti-coal alliance by investing in new coal power plants overseas, an environmental organization says. Friends of the Earth Canada joined with Germany's Urgewald to release a report today looking at the top 100 private investors putting money down to expand coal-fired electricity — sometimes in places where there isn't any coal-generated power at the moment. The report lists six Canadian financial companies among the top 100 investors in new coal plants in the world. Together, Sun Life, Power Corporation, Caisse de depot et placement du Quebec, Royal Bank of Canada, Manulife Financial and the Canada Pension Plan Investment Board have pledged $2.9 billion towards building new coal plants overseas . Urgewald tracks coal plants around the world...

Rob Urban, Camila Russo and Yuji Nakamura of Bloomberg report, Two trading halts, 26% gain: Bitcoin hits Wall Street with a bang : Bitcoin has landed on Wall Street with a bang. Futures on the world’s most popular cryptocurrency surged as much as 26 per cent from the opening price in their debut session on Cboe Global Markets Inc.’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on Cboe’s website was so heavy that it caused delays and temporary outages. The website’s problems had no impact on trading systems, Cboe said. “It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures,” said Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia. The launch of futures on a regulated exchange is a watershed for bitcoin, whose surge this year has captivated everyone from mom-and-pop speculators to Wall Street trading firms. The Cb...