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Getting the most out of investment dollars

Institutional investors and pension plan consultants need to get the most out of their investment dollars. How do investors meet their investment yield requirements and future obligations?

Below are eight strategies asset managers can employ to meet pension plan needs for yield-enhanced income. The historical yield differential between the income producing asset category and its benchmark is highlighted in basis points (bps).

Each plan’s optimal asset allocation and volatility targets should be based on client risk preference, funded status, interest rate sensitivity, and overall organizational objectives.

How do investors meet their goals

For more in-depth information about enhancing yield, view this Investment Perspectives article. Or contact us at 1-800-665-6005 or info@securianam.com.

Read the full article on the 8 strategies

8 ways pension plan investors can enhance yield

400 700 basis points

Master Limited Partnerships (MLPs)

Alerian MLP Index vs. S&P 500 

200 300 basis points

High Yield Bonds

Current Yield of Bloomberg Barclays US HY BA - 2% Issuer Capped vs. Current Yield of Bloomberg Barclays US Aggregate Bond Index

200 300 basis points

Real Estate Investment Trusts (REITs)

FTSE NAREIT Index vs. S&P 500

100 200 basis points

Dividend Paying Equities

S&P 500 Utilities Index vs. S&P 500

100 150 basis points

Commercial Mortgage Loans

vs public portfolio of similar duration and quality

100 150 basis points

Long Duration Bonds

Current Yield of Bloomberg Barclays US Long Gov/Cred Index vs. Current Yield of Bloomberg Barclays US Aggregate Bond Index

50 100 basis points

Investment Grade Private Credit

vs public portfolio of similar duration and quality

50 100 basis points

Options

VIX - S&P 1M Vol vs. 3 month T-Bill

A basis point is one hundredth of one percent.

Past performance is no guarantee of future results.

The opinions expressed herein represent the current, good faith views of the author at the time of publication and are provided for limited purposes, are not definitive investment advice, and should not be relied on as such. The information presented in this article has been developed internally and/ or obtained from sources believed to be reliable; however, Advantus does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this article are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Advantus assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change.

F93675 6-2019 DOFU 6-2019

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