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Pensions embracing innovation to tackle low-return, high volatility

RetirementEurope’s pension plans are moving away from a formulaic investment approach to identify good returns in response to the current period of low returns and higher market volatility.

According to the 2018 Annual European Pensions Survey published this week institutional investors are increasing allocations to alternative investments.

The survey, jointly produced by French asset manager Amundi and the Create-Research consultancy, ESG is more in favour than ever before and institutional investors are increasingly using new asset allocation tools.

In addition the report found that, in the absence of reforms, pension plans are increasingly worried about the EU’s ability to have a concerted response when the next economic crisis comes

Pascal Blanqué, group chief investment officer at Amundi, said: “Political risk has gone from being a temporary disturbance to taking centre stage in more fragile economic and financial markets.

“In response, pension plans are being utterly pragmatic in how they are responding. Their asset allocation is witnessing continuous innovations.”

The report was based on a survey of 149 pension plans across Europe with total assets of €1.89 trillion.

©2018 funds europe