Pensions Management: Asset Allocation and Capital Market Issues in Developing Economies

Dates:

• 16 - 20 June 2025 - London (£2,850)

Course Outline

The ultimate goal of pension schemes is to deliver pension promises to its members, either those that are explicit in Defined Benefit (DB) schemes such as final salary-based entitlements or those implicit in Defined Contribution (DC) pensions, where members expect their scheme to provide a meaningful retirement income.

These liabilities need to be matched by the scheme’s assets, which should be structured in a way that reflects the age profile of members. This process – generally referred to as Strategic Asset Allocation (SAA) – forms the basis for pension schemes’ portfolio construction and investment strategy.

Around the SAA, investment managers may take active risk positions based on their analysis of expected macroeconomic conditions. They may also over- or underweight specific investment types relative to the SAA based on their outlook using a Tactical Asset Allocation (TAA) overlay. In the long term, pension fund asset values must be protected against inflation which erodes the real value of both investment capital and retirement income.

Course Objectives: 

On completion, you will be able to:

• Understand the processes underlying asset allocation for pension funds
• Analyse the key investment issues for Defined Benefit & Defined Contribution schemes
• Appreciate the fundamental role of Strategic Asset Allocation in pension investment
• Assimilate the relative roles of Strategic & Tactical Asset Allocation for pension funds
• Assess the impact of regulatory constraints on investment strategy
• Appreciate the consequences of capital market limitations for pension investment

Key Topics

• Pension scheme liabilities and portfolio construction objectives
• Inflation risk and pension investment strategies
• Strategic Asset Allocation and actuarial advisors
• Tactical Asset Allocation and the role of investment committees & advisors
• Capital markets dynamics and pension fund investment
• Portfolio strategies for managing pension scheme risks and uncertainty

This is week one of The Managing Pensions in Developing Economies Toolkit.