We are pleased to attach our Global Market Bulletin for August.
Historic low interest rates may be good for mortgage holders, but they are a huge concern for savers and managers of pension funds. Pension funds have the actuarial task of building their portfolio to service the needs of pensioners for decades. Hitherto, ten year bonds have been a guiding force to underpin higher risk assets such as property and shares, but with the UK ten year Gilt at 0.79%, the 10 year Treasury at 1.55% and the 10 year Bund at -0.05%…, perhaps it’s no wonder that 84% of UK pension funds are in deficit to their funding obligations. (20 year gilts are currently yielding minus 1.4%.)
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