The Covid-19 pandemic has highlighted why pension funds need to diversify across asset classes and geographies to continue earning good returns in a low interest rate and high inflation environment, experts have said at the Arab Pensions Conference 2021.
Markets and equities have performed well since the 2008 financial crisis and institutional investors received healthy returns, while pension funds were able to meet their obligations during this period, experts said, during a panel session on the second day of the Arab Pensions Conference 2021, which was held online from Bahrain.
Held under the theme Will the next 50 years generate the same investment returns for pension funds?, the session focused on how funds could continue generating positive returns in the long term.
“At Jordan’s Social Security Investment Fund, portfolio diversification reduced the negative impact of the pandemic,” Kholoud Saqqaf, chief executive of SSIF, said.
“We have witnessed a growth in our investment returns. Our assets grew to 12.1 billion Jordanian dinars ($17bn) as of the end of September from 11.2bn dinars at the end of 2020. Our allocations were primarily in government bonds with fixed returns, blue-chip banks and blue-chip industry stocks.”
Although the SSIF’s investments are all local, it decided to diversify outside Jordan after the pandemic, Ms Saqqaf said.
“We steered our investments towards agriculture, infrastructure, water and energy sectors.”
The combined retirement savings gap is expected to reach $400 trillion by 2050 between eight major economies – Canada, Australia, the Netherlands, Japan, India, China, the UK and the US, according to a 2019 report by the World Economic Forum.
Meanwhile, there are long-term concerns about the 60:40 allocation that pension funds typically give to equities and bonds, according to Karim Chedid, head of investment strategy for iShares EMEA at BlackRock. Fixed-income returns are extremely low, while volatility is starting to pick up slowly in equities, he said.
“As we look at long-term strategic allocation, diversifying is important. Since the GFC, stocks and bonds have been strongly co-related. Is that enough to diversify or look at alternative schemes like private equity, infrastructure and real estate?” Mr Chedid asked.
For some pension funds, there are regulatory constraints on diversification beyond domestic territories
Alistair Byrne,
head of retirement strategy, State Street Global Advisers
Pension funds should consider investing in emerging market debt and sustainability, Mr Chedid said.
Fund managers also need to hedge their portfolios against inflation by increasing exposure to commodities such as gold, gold producers and diversifying into cyclicals and defensives, he added.
“For some pension funds, there are regulatory constraints on diversification beyond domestic territories. There is a strong case to lobby against it and invest in global equities, emerging market equities, fixed-income and emerging market debt,” said Alistair Byrne, head of retirement strategy and UK institutional distribution at State Street Global Advisers.
Investors need to have the right portfolio to hedge against risks that might not have been there before, according to Abdulatif Alseif, co-founder and managing director of Sabeen Investment.
“Consider investments in alternatives or other complex instruments. Passive strategies worked very well over the past decade and provided investors good returns at reasonable costs. With increased market volatility, will active management be back again?”
Investors today also must be more efficient and consider what to do with investment execution costs and how to renegotiate fund manager fees given the low interest rate environment, Mr Alseif said.
Honeymoonish
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Herc's Adventures
Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5
Need to know
When: October 17 until November 10
Cost: Entry is free but some events require prior registration
Where: Various locations including National Theatre (Abu Dhabi), Abu Dhabi Cultural Center, Zayed University Promenade, Beach Rotana (Abu Dhabi), Vox Cinemas at Yas Mall, Sharjah Youth Center
What: The Korea Festival will feature art exhibitions, a B-boy dance show, a mini K-pop concert, traditional dance and music performances, food tastings, a beauty seminar, and more.
For more information: www.koreafestivaluae.com
First Person
Richard Flanagan
Chatto & Windus
MATCH INFO
Euro 2020 qualifier
Croatia v Hungary, Thursday, 10.45pm, UAE
TV: Match on BeIN Sports
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
Where to apply
Applicants should send their completed applications - CV, covering letter, sample(s) of your work, letter of recommendation - to Nick March, Assistant Editor in Chief at The National and UAE programme administrator for the Rosalynn Carter Fellowships for Mental Health Journalism, by 5pm on April 30, 2020.
Please send applications to nmarch@thenational.ae and please mark the subject line as “Rosalynn Carter Fellowship for Mental Health Journalism (UAE programme application)”.
The local advisory board will consider all applications and will interview a short list of candidates in Abu Dhabi in June 2020. Successful candidates will be informed before July 30, 2020.
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Usain Bolt's time for the 100m at major championships
2008 Beijing Olympics 9.69 seconds
2009 Berlin World Championships 9.58
2011 Daegu World Championships Disqualified
2012 London Olympics 9.63
2013 Moscow World Championships 9.77
2015 Beijing World Championships 9.79
2016 Rio Olympics 9.81
2017 London World Championships 9.95
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
Ashes 2019 schedule
August 1-5: First Test, Edgbaston
August 14-18: Second Test, Lord's
August 22-26: Third Test, Headingley
September 4-8: Fourth Test, Old Trafford
September 12-16: Fifth Test, Oval
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
Results
- Brock Lesnar retained the WWE Universal title against Roman Reigns
- Braun Strowman and Nicolas won the Raw Tag Team titles against Sheamus and Cesaro
- AJ Styles retained the WWE World Heavyweight title against Shinsuke Nakamura
- Nia Jax won the Raw Women’s title against Alexa Bliss
- Daniel Bryan and Shane McMahon beat Kevin Owens and Sami Zayn
- The Undertaker beat John Cena
- The Bludgeon Brothers won the SmackDown Tag Team titles against the Usos and New Day
- Ronda Rousey and Kurt Angle beat Triple H and Stephanie McMahon
- Jinder Mahal won the United States title against Randy Orton, Rusev and Bobby Roode
- Charlotte retained the SmackDown Women’s title against Asuka
- Seth Rollins won the Intercontinental title against The Miz and Finn Balor
- Naomi won the first WrestleMania Women’s Battle Royal
- Cedric Alexander won the vacant Cruiserweight title against Mustafa Ali
- Matt Hardy won the Andre the Giant Battle Royal
Brief scores:
Arsenal 4
Xhaka 25', Lacazette 55', Ramsey 79', Aubameyang 83'
Fulham 1
Kamara 69'
SNAPSHOT
While Huawei did launch the first smartphone with a 50MP image sensor in its P40 series in 2020, Oppo in 2014 introduced the Find 7, which was capable of taking 50MP images: this was done using a combination of a 13MP sensor and software that resulted in shots seemingly taken from a 50MP camera.
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
