Insights

With the UK government committed to net-zero carbon emissions by 2050, there’s a growing focus on the transition readiness of UK real estate sectors, and the implications for portfolios.

We discuss how schemes can navigate a thorny investment landscape – and prepare themselves for buyout.

In their latest investment outlook, our Asset Allocation team explain why they worry that hopes of a ‘soft landing’ for the world economy may prove ephemeral – and what this means for how they are positioning.

Rising interest rates have lowered future liabilities while decreasing LDI portfolio collateral levels. Here’s how schemes can seek to balance this scenario.

Index strategies can target well-defined decarbonisation pathways that may help to avoid climate risks

Looking back, private markets have experienced robust returns, with 2021 making a high point. Fast forward to this year and the six months to June 2022, and the wider economic and markets environment is barely recognisable.

The benefits of cashflow driven investment (CDI) are slightly controversial. Some believe it is a powerful risk management strategy for DB schemes nearing their endgames, whereas others are more sceptical given that it may compromise multi-asset diversification

While consensus forecasts suggest further economic recovery in 2022, we remain prepared for bumps in the road.

Even though 2022 has begun with an abrupt change in the macro narrative, stoked by the Fed, we hold the line on our bullish outlook for risk assets.

Global temperatures are currently on a trajectory to increase by nearly 4°C above pre-industrial levels, which would be truly catastrophic, unless action is taken.

We continue to favour staying long equities, and are prepared to increase our exposure in a dip, as investors bask in the sunshine of a global economy in mid-cycle.

In this article, we look at the high Sharpe ratios, improvement in quality and low duration of global high yield corporate bonds and explain why we believe that this asset class could be a valuable addition to a DB pension scheme portfolio.

As the French philosopher Voltaire said, “Uncertainty is an uncomfortable position. But certainty is an absurd one.”

An update on our recent engagement activities and some key considerations for our clients.

There is a growing consensus that the global financial industry has a major role to play in helping the transition towards a low carbon economy to limit global warming

Despite the ongoing challenges, we see next year as a time for healing – for the economy, environment and society.

With over £100bn of defined contribution (DC) assets under management, Legal & General’ is the largest DC pension provider in the UK.

DB (defined benefit) pension schemes are progressing along their journey to end-game, with many becoming increasingly cashflow negative and struggling to balance competing requirements for returns and cashflow.

In this outlook, teams from across LGIM offer answers to some of the biggest questions for investors raised by COVID-19.

As activity in public credit markets has oscillated across our screens, private credit markets have been largely overlooked.

Our research into the ESG views of Boomer, Gen X and Millennial savers

In this outlook, teams from across LGIM examine the opportunities and risks with which investors are presented in this context.

The second annual results of our Climate Impact Pledge showcase the corporate leaders and laggards on climate action; we are encouraged by improvements across sectors but will continue to press companies to meet this era-defining challenge.

Our survey responses have revealed that inequality is an underlying, long-term thread weaving through many apparently shorter-term issues.

A future in which there is less work to be done will radically reshape the economy, with important consequences for investors – including some contrarian implications for the consumer and real-estate sectors.

With global interest rates remaining near all-time lows, and $15 trillion of debt providing investors a negative yield, bond-market bears are in danger of becoming extinct. But could today’s ageing society finally provide the trigger for a sustained bond-market selloff?

We stay bullish on risk assets as we believe the medium term outlook for markets has actually improved

DB pension schemes typically pay inflation-linked benefits with caps and floors, called limited price indexation (LPI) linked benefits. How should trustees manage these cashflows?

Raising the retirement age can help with the fiscal costs of living longer. But our unhealthy lives could force us to look at other options.

In the next economic downturn, central banks will likely have to reach further into their unconventional playbook. But which policymakers have the most freedom to act and what does that mean for asset prices?

Developments in trade tensions, emerging markets and European politics may determine the trajectory of markets over the coming months.

Whether you’re looking at equities, bond yields, currencies or economic strength, it’s the US that’s been leading the charge. Is this likely to continue?

The American midterm elections are approaching and the crystal ball gazing has begun. Here’s what investors should consider regardless of whether the US votes for a ‘distilled Donald’, the ‘Democratic double’ or a ‘divided democracy’.

Today’s China no longer matches the view of the country that most people have. Could this gap between perception and reality offer a wealth of investment opportunities?

The ‘one share, one vote’ standard has been in place since 1940 but the number of companies with unequal voting rights is on the rise.

What should investors make of rising yields, higher volatility and wider credit spreads?

Get ready for a shift in UK market leadership, says Stephen Message, manager of the L&G UK Equity Income Fund.

Are market expectations too good to be true?

Looking into 2018, US policies will remain one of the biggest focal points for EM assets, even if it has felt like ‘waiting for Godot’.

October marked a significant milestone in DC: five years since the beginning of auto-enrolment.

In this quarterly outlook we outline our asset allocation views and address three key questions on equities, US monetarypolicy and emerging markets.

The diverse sovereign and corporate debt spectrum of such a wide group of emerging market countries highlights the need for investors to scrutinise their individual debt profiles more closely

Some countries are in pole position, while others are in danger of crashing out. The global labour force (the number of 15-70 year olds willing to work) is slowing down.

Population density and growing congestion could limit growth in vehicle penetration.

After more than a century of incremental change, technological trends and consumer demands around road vehicles are converging.

In the US, the board refreshment process is under scrutiny yet remains focused on retirement age limits. LGIM suggests a better way for US companies to refresh their boards.

Recent currency market volatility, particularly the fall in the value of the pound, has highlighted the importance of determining the appropriate level of currency hedging for investors in international assets.

What is a fallen angel? In theological terms, a fallen angel is one who has rebelled and been exiled from heaven.

In this quarterly outlook we outline our asset allocation views and address four key questions on wages, sterling, trade and rates.

It’s tempting to think otherwise, but not all emerging market debt is created equal. In this piece we examine the public, private and external debt profiles of individual emerging markets.

Our forecast of a long-term structural shift away from coal could have dramatic implications for investors.