Our everyday lives are a succession of small decisions. Often unconsciously, we make decisions daily that ultimately influence our longer-term well-being. These range from the seemingly mundane, such as what will we eat, how much will we exercise, in what ways we use our spare cash, to the more significant around professions, relationships and savings. Each of these play a role in our personal aspirations and expectations for the future. Paying attention to seemingly insignificant decisions in the short-term, can deliver results for health, happiness and prosperity in later life. There is also growing recognition that small individual decisions can combine to benefit a wider population, particularly in relation to combatting the climate crisis.

Long-term thinking is central to the pension industry. But greater market uncertainty and volatility are increasingly hindering the short-term decision-making process for pension stakeholders. This dilemma is something we have been discussing with many of you over the past couple of years. It recently formed the main topic of this month’s Pension Fund Club digital event, as we try to identify the trends best suited to meeting long-term objectives. A particular focus was responsible investing; a prime example of the need to balance short-and long-term, and a theme that is gaining in importance both at an individual and scheme level for pension investing.

In this edition of the Pension Fund Letter, we continue our discussions on this topic, looking at what it means for different types of pension funds and their KPIs, as well as possible ways of addressing the issue.

We continue with a look at five takeaways from a survey of pension funds on their different approaches to responsible investing and some of the challenges encountered. We have also recently researched how different pension funds approach currency hedging as FX is increasingly considered a source of return enhancement and/or risk mitigation for portfolios. The results can be found in article three.

We wrap up with our usual summary of recent market performance and its impact on funding ratios.



Francesca CICERI
Global Head of Institutional Coverage
Global Head of Corporates and Corporate Pension Funds Clients
Institutional Content Marketing