Demand for alternative beta continues as pension schemes seek lower cost solutions, says UBS
There is a growing interest in the fiduciary management space, with assets under management in the UK estimated to be over GBP 50 billion as of 2012, according to a UBS Global Asset Management study.
Pension Fund Indicators 2014 reveals that some challenges, however, continue to test the effectiveness of fiduciary management in practice.
Alternative beta also continues to be a hot topic and the search for lower-cost alternatives with fewer constraints than current passive solutions is likely to continue until investors feel that they are getting their money's worth.
Achieving full funding in a low yield environment has become the primary concern for many pension scheme trustees. Allocations to traditional asset classes should provide the backbone of any deficit recovery plan. However, trustees may wish to consider investing in a broader range of asset classes, along with the appropriate governance structure, to move schemes closer to full funding.
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