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Managing Volatility

State Street Global Advisors is one of the world’s leading asset managers, and provides investment expertise across the asset class and risk spectrums.

Effective volatility management is crucial to pension fund performance, and we have the tools and expertise to help pension investors. Whether it’s asset volatility leading to underperformance and hampering schemes’ capacity to effectively capture growth opportunities or interest rate and inflation movements adversely impacting scheme liabilities, volatility is a challenge that can be mastered. 

Our expertise extends to a range of volatility monitoring and management strategies, specially designed to meet the needs of UK defined benefit and defined contribution pension plans. We can help schemes better manage asset allocation and capture growth opportunities while minimising downside risks.  We offer a range of  approaches, including target volatility, liability driven investing solutions, and dynamic, market-aware asset allocation strategies that continually adjust to match the market environment.

We look forward to sharing our latest insights, research and intelligence on this page. You can also visit www.ssgainsight.com 

Contact mark_mcnulty@ssga.com or nigel_aston@ssga.com for further information.

Latest news

Global Market Outlook

TIME TO PIVOT: With 2017 likely to be marked by further political and economic change alongside shifting market dynamics, where are the key opportunities and risks for investors? Click here to read more. 

Gray Swans for 2017

The new year sees the return of our “gray swans”—the top ten list of tail risks identified by SSGA investment teams. Click here to read more. 

The market impact of the BREXIT vote 

Rick Lacaille, Global Chief Investment Officer, discusses some of the immediate and longer-term impacts for global investment markets. Click here to read more. 

Retirement to Transition

Our latest edition of CONTRIBUTE delivers insights and research on topics including index strategies within default funds, the role of financial technology in improving member engagement, and behavioural analysis of member decision making at retirement. Click here to download your issue.

New Choices, Big Decisions 

What pensions personality are you? In part 2 of research conducted with The People's Pension, we explore consumer decision making and behaviours under Freedom and Choice. Click here to read Report 1 and here to read Report 2. 

Taking some of the worry out of market volatility

Large falls in financial markets have the potential to seriously knock the confidence of DC savers. The impact of volatility on pension scheme savings can play a critical role in how they percieve their savings and, indeed, how they react over the longer term. Here we look at how target volatility triggers can be part of the solution to help take some of the worry away. Click here to read more. 

Our Top Ten “Gray Swans” for 2016

Last year, State Street Global Advisors’ (SSGA) ISG Politics and Policy team published a list of our “Top 10 Black Swans for 2015.” We hedged our predictions by reminding readers that predicting tail risk is, by nature, “a nearly impossible exercise,” yet at least 4 of our 10 predictions came true.

We’ve decided to try again this year, with a couple wrinkles. First, we’re pegging our tail-risk predictions to last month’s Lunar New Year, given the outsized role China appears poised to play in downside risk this year. Second, we’re changing the swans’ color, from black (meaning exceptionally rare and unknown) to gray (unlikely, but possible and potentially foreseeable). These forecasts are not our base case scenarios, but with market volatility high, we’re willing to bet we’re getting warm. Click here to download our list of possible flare-ups for 2016

CONTRIBUTE Magazine – Have you got your copy?

New DC member research, investment strategy and expert insight to help you get members on the path to confidence at retirement. Click here to download your issue.

Equity Market Risk – Mastering Volatility

Market volatility remains a risk for investors. Concern over growth in China,  the direction of US interest rates, elections, geopolitical upheaval in the Middle East and structural issues with the euro are likely to cause ongoing consternation in equity markets. Prudent investors may need to prepare for a bumpy ride. Our team uncovers the likely sources of volatility in the equity market and provide a guide to strategies that seek to protect your portfolio and participate in any upside. Read more.

KEEP YOUR STRATEGY A STEP AHEAD IN 2016: Six Investment Ideas to Survive a Low Growth World

With low global economic growth and ongoing volatility in financial markets, we reveal our top ideas for your investment strategy. Discover more in our 2016 Global Market Outlook.

Economic commentary: The Outlook for the Chinese Economy at Mid-Year 2015

The recent bout of market volatility stemming from concerns over China are a timely reminder of how volatility works to test the resilience of equity portfolios. The global market falls in August were the largest since the major crashes of 2000-2 and 2007-9. We explore what’s next in store  for global markets.  Find out more here.

Keeping Volatility Under Control

The right downside protection strategies can help protect investors against significant losses - important for preserving portfolios and helping to allow maximum participation in future gains. One straightforward way of protecting against volatility is to use Target Volatility Triggers (TVTs). TVTs seek to limit portfolio volatility in order to substantially reduce the effect of markets falls.

Read our paper on how TVTs aim to improve portfolio efficiency by reducing realized volatility while providing a similar return to a strategic benchmark.

EQUITY MARKET RISK - Downside Protection Strategies That Help You Participate and Protect

After the hard lessons of the 2008 Global Financial Crisis, many institutional investors and pension funds are under pressure from their stakeholders to find better ways of limiting the risks that they face — meaning that downside protection strategies have assumed new importance for many. At State Street Global Advisors we think these strategies could help investors who wish to preserve and accumulate capital. Read the full report here.

Walking the tightrope - global research report
 
State Street Global Advisors’ latest research explores institutional investors’ attitudes toward equity market risk and looks at the downside protection strategies they are using to insure their portfolios against volatility. Read the full report here.

CONTRIBUTE Magazine – Spring/Summer Edition
 
CONTRIBUTE is the State Street Global Advisors magazine dedicated to ideas, research and real-world experience to support you in helping DC members retire with confidence. Our aim is to help achieve better retirement outcomes for the savers within our clients’ workplace schemes. This magazine gives those savers a voice, and provides a forum for discussion on the challenges and solutions along their journey to retirement.

In this edition, the new Freedom and Choice legislation takes centre stage as we investigate the impact on scheme members and their DC investments.

Global Outlook 2015 – Getting the Big One Right

SSGA has released its Global Outlook for 2015. Among the five key themes for investors is Equity Market Risk. Despite the opportunities that still exist, Rick Lacaille, SSGA’s Global Chief Investment Officer, explains that investing in equities could be risky in 2015, due to the potential for increased volatility. As advanced economies follow increasingly divergent paths with their monetary policy and volatility rises, investors must ensure they appropriately protect their portfolios.

State Street Global Advisors Investment Insight Columns

Investment Insight - March 2017

Sahil Sethi, Senior DC Strategist at State Street Global Advisors looks at shifting perspectives and how retirement ages are extending out. He discusses making the transition into retirement, saving more and looking ahead. 

Investment Insight - November 2016 

Maiyuresh Rajah, Senior DC Investment Strategist at State Street Global Advisors looks at how index investing can keep members on track by explaining the art and science of index precision and the new opportunities.  

Investment Insight - August 2016 

Alistair Byrne, Senior DC Investment Strategist at State Street Global Advisors looks at how the new freedoms offered to pension savers have revolutionised the way they can access their savings at retirement. 

Investment Insight - May 2016

Sophie Ballard, Senior Relationship Manager at State Street Global Advisors looks at how to take some of the worry out of market volatility and explains how target volatility triggers can be part of the solution to help take some of the worry away.

Investment Insight - February 2016

Jason Allan, UK Head of Pension Funds at State Street Global Advisors looks at Mastering Volatility and explains how investors can use strategies to help limit downside, but allow them to participate in any upside.

Investment Insight - December 2015

Jason Allan, UK Head of Pension Funds at State Street Global Advisors looks at Target Volatility Triggers (TVTs) and explains why they should be considered, how they work, how to implement them and what they can achieve.

Investment Insight - August 2015

Howard Kearns, Head of LDI EMEA at State Street Global Advisors explains the de-risking strategies that schemes could use in the face of continued low interest rates.

Investment Insight - May 2015

Alistair Byrne, Senior DC Investment Strategist at State Street Global Advisors, reviews new research that aims to understand more about how defined contribution members approaching retirement might access their savings and draw income.

Investment Insight - February 2015

Howard Kearns, Head of Liability Driven Investment EMEA at State Street Global Advisors, asks: 'Are you worried about equity volatility?'. He looks at how to protect equity allocation against significant stock market falls including reducing equity exposure in times of high volatility.

Investment Insight - November 2014

Bill Street, Head of Investments EMEA at State Street Global Advisors, discusses monitoring and managing volatility. He looks at why volatility has been low, what may drive it higher, and asks when is the right time to position portfolios?

Managing Volatility resources

The Future of Retirement in the UK with Robert Peston

Recently Nigel Aston took part in Asset TV’s Institutional Masterclass to discuss the future of retirement in the UK with leading industry professionals. Along with Aberdeen Asset Management, HSBC Global Asset Management and Legal & General Investment Management they debated about the size of savings needed to retire, tax relief and when DC plans should start automatic enrolment.

EMEA Snapshot - positioning for downside protection

Complete Guide to Advanced Beta - Beyond Active and Passive

Balancing a Liability Driven Investment Strategy if Interest Rates Rise

Our Top 10 'Black Swans' for 2015

Worried about equity volatility?