Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Aussie funds improve global rankings
By Penny Pryor
All Australian funds moved up the size rankings in the latest annual survey of the world’s top 300 retirement plans, produced by publisher Pensions & Investments and consulting firm Towers Watson.
Of the 15 Australian funds that appear on the list, five are in the top 100, with the Future Fund having the highest ranking at 29th.
Total assets of the world’s largest 300 pension funds increased by 9.8 per cent to US$14 trillion over the year, and that sum represents 47 per cent of the total global pension assets, according to a report in Pensions & Investments last week. Towers Watson is scheduled to publish its figures tomorrow (September 10).
The biggest retirement fund in the world remains Japan’s Government Pension Investment fund, with assets of US$1.292 trillion, even though its assets had fallen from US$1.395 trillion in 2012. The assets of the second largest retirement fund – Norway’s Government Pension fund – rose from US$575.5 billion, to US$712.6 billion over the year.
Also of interest was the rise in funds by China’s National Social Security fund, which increased assets to US$177.5 billion from US$133.7 billion the previous year, and improved its ranking from 13 to 10.
The table below, in US dollars, is based on the 2013 and 2012 P&I and Towers Watson rankings.
