A new survey has revealed that fund managers expect to see an increase in pension funds practising risk hedging in the coming months.
The research, conducted by human resource firm Hewitt Associates, shows that 65 per cent of 100 fund managers asked thought that pension funds will increase hedging activity, reports the Financial Times
Andy Tunningley, head of Hewitt's UK investment practice stressed that obtaining the correct "risk/reward balance" will be a crucial aspect of the coming year.
Lennox Hartman, head of fixed income research agreed, stating: "Getting the balance right is likely to be achieved by diversifying across asset classes and strategies within the pension fund's assets. This includes a mix of beta (benchmark-based) and alpha (excess return) strategies which likely will include hedge funds, currency funds and long/short strategies."
Additionally, 95 per cent of advisers taking part thought that pension funds would continue to shift towards absolute return strategies, the report continues.
Hewitt Associates is a provider of multi-service HR business process outsourcing (BPO) and integrating HR outsourcing and consulting.
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