Pension Pulse

Benefits Canada reports, CAAT posts 13.9% return for 2013 : The Colleges of Applied Arts and Technology (CAAT) Pension Plan reported a 13.9% net return for the year that ended on December 31, 2013. The DB plan’s net assets climbed to $7.1 billion, up from $6.3 billion the previous year. In its valuation filed as of Jan. 1, 2014, the pension plan is 105% funded on a going-concern basis and has a funding reserve of $525 million. The plan returned 14.5% before investment management fees. Since the 2008 economic meltdown, the CAAT Pension Plan’s investment portfolio has produced an average annual return of 11.7% gross and 11.1% net of investment management fees. Last year, contributions to the CAAT plan, which are shared equally by employees and employers of the Ontario college system , amounted to $368 million. Income from investments was $860 million. The plan paid $344 million in pension benefits for the year. The CAAT plan has 22,000 members working in the Ontario colle...

Over the weekend, Dr. Michael Castor, Founder and Managing Portfolio Manager of SIO Capital Management , shared his thoughts with me on investing in healthcare (added emphasis is mine): Persons interested in allocating/investing their assets tend to have two different schools of thought regarding investing in healthcare. The first line of thinking, which seems to be more common, is that healthcare is a great area in which to invest because there exist: (1) unmet medical needs yet to be addressed, (2) amazing scientific technologies that were not in existence just a few years ago, and (3) an aging demographic globally and commensurately an increasingly large pool of consumers of healthcare goods and services. All of these are true, but they fail to recognize other truths that are equally important. First, there has been a trend toward aging demographics for decades. Second, while technologies are better, the hurdles for discovering new drugs and therapies are much higher. Over t...

Andrew Hussey of The Guardian writes, Occupy was right: capitalism has failed the world : The École d'économie de Paris (the Paris School of Economics) is actually situated in the most un-Parisian part of the city. It is on the boulevard Jourdan in the lower end of the 14th arrondissement, bordered on one side by the Parc Montsouris. Unlike most French parks, there is a distinct lack of Gallic order here; in fact, with lakes, open spaces, and its greedy and inquisitive ducks, you could very easily be in a park in any British city. The campus of the Paris School of Economics, however, looks unmistakably and reassuringly like nearly all French university campuses. That is to say, it is grey, dull and broken down, the corridors smelling vaguely of cabbage. This is where I have arranged an interview with Professor Thomas Piketty, a modest young Frenchman (he is in his early 40s), who has spent most of his career in archives and collecting data, but is just about to emerge as the most ...

Marc Lichtenfeld, the Oxford Club’s Chief Income Strategist and author of Get Rich with Dividends , wrote a great article last March, Three Simple Moves to Resurrect Your Portfolio : This week is a big one for the Jewish and Christian faiths. On Monday and Tuesday, Jewish people celebrated Passover, commemorating their ancestors' escape from slavery by the Egyptians. The story, immortalized on film in the classic movie The Ten Commandments, features Moses (played by Charlton Heston) telling the Egyptian Pharaoh (Yul Brynner) to "let my people go." On Friday and Sunday, Christians celebrate Good Friday and Easter, marking the crucifixion and resurrection of Jesus. Investors can use the themes of the holidays to resurrect their portfolios if they aren't getting the performance they want. Like the slaves in Egypt whose hard work benefitted someone else, many investors' capital doesn't work hard for the owner, but instead makes big profits for mutual ...

Lawrence Delevigne of CNBC reports, Outlook for pensions is pretty awful: Bridgewater : Here's a scary retirement prediction: 85 percent of public pensions could fail in 30 years. That's according to the largest hedge fund firm in the world, Bridgewater Associates, which runs $150 billion for pensions and other institutions like endowments and foundations. Public pensions have just $3 trillion in assets to cover liabilities that will balloon to $10 trillion in future decades, Bridgewater said in a client note last week obtained by USA Today . To make up the difference, the firm said pensions will need to earn about 9 percent per year on their investments. But Bridgewater estimates pension funds are more likely to make 4 percent. If that's true, the vast majority—85 percent—of retirement systems will run out of money because they will continue to pay out more than they take in. The report comes as pensions wrestle with what rates of return to assume given thei...

Matthew Boesler of Business Insider reports, The Big Unwind: Here's How Hedge Funds Drove The Brutal NASDAQ Selloff : Volatility has returned to the markets, and growth stocks in information technology and health care have led the way down. The chart above (click on image), from Deutsche Bank strategist Keith Parker, shows the extent to which fund positioning has helped fuel the recent decline in the stock market. "Performance over the last month across stocks and sectors has been driven by position covering," says Parker in a report on recent investor positioning and flows. "Through the first two months of the year, long/short equity hedge funds and mutual funds were neutral the market but long growth stocks, which helped underpin outperformance through the January-February sell-off. The rotation out of growth and into value starting in early March hurt and funds were forced to unwind positions." Chart 2 provides a visual display (click on image be...