Stress tests thwarting German schemes’ equity investments, experts warn

first_imgSolvency “stress tests” required by law are preventing German pension funds from increasing their equity investments, industry figures have warned.According to legal investment limits, Germany’s largest Pensionskasse – the BVV, for banks and the financial services industry – is allowed to invest up to 35% of its assets in equities.Yet BVV managing director Rainer Jakubowski, speaking at the Handelsblatt annual conference in Berlin, pointed out that the scheme was not even allowed to maintain a 27% equity allocation, due to additional regulations.According to German risk-management rules, Pensionskassen have to demonstrate their solvency using a stress test, which caps the amount of risk the institution can take in equities. “This stress test, which was put in place in 2004, forces us into a relatively low equity allocation, which I think is [fundamentally] wrong,” Jakubowski said.He said that, if he had more freedom in terms of asset allocation, he would “do some things differently”.Hans Dieter Ohlrogge, chairman of the board at the IBM Pensionsfonds and Pensionskasse, agreed that the stress test was “a problem” because “it prevents a sensible real asset allocation in most cases”.At IBM, he “has more freedom than others”, he said, both in the Pensionsfonds, as this is less regulated, and in the Pensionskasse because the plan sponsor has an obligation for top-ups.“We have a higher real asset allocation than the average Pensionskasse, and we can cope with the volatility,” he added.Ohlrogge argued that regulations should provide more freedom on the liability side – by allowing temporary underfunding, for example.“But current regulation goes exactly the opposite way,” he said. “Pension funds are being driven into higher volatility and higher-risk investments because of the low interest rates, but institutions are not handed any instruments to handle the higher volatility.”Together with a shrinking discount rate in many cases, the capacity to bear risk is also lowered, which, in turn, drives institutions into non-returning asset classes – “a vicious cycle”, he said.“Eventually,” he added, “contributions have to be increased, which makes retirement provision unattractive. In fact, we are in an environment in which occupational pensions are being strangled.”Jakubowski said institutions were now being driven by continuous mark-to-market assessments, often resulting in poor asset allocation decisions.“We need the political understanding that the artificially created low interest rate einvironment is making retirement provision more difficult and that counter measures are needed,” he said.He added that, should the low interest rate continue for much longer, German pension funds would have problems achieving their minimum guarantees, as institutions are “punished by the supervisory body” for investing in most asset classes returning 3-4%, which is roughly the guarantee level.last_img read more

Low bond yields trigger review of Norwegian oil fund’s equity allocation

first_imgNorway’s NOK7.1bn (€733bn) sovereign wealth fund may see its exposure to equity increase beyond its current 60% allocation, after the government commissioned a review of its exposure to listed stocks.The Norwegian Ministry of Finance has asked a nine-strong committee, chaired by Knut Anton Mork, long-standing chief economist of Handelsbanken, to review the Government Pension Fund Global’s (GPFG) approach to equity investment, citing concerns the fund’s current exposure to fixed income no longer reduces volatility.The committee will also include a number of academics, financial markets experts and Sigbjørn Johnsen, a member of the opposition Labour party who has twice served as Norway’s finance minister.Setting out the review’s terms of reference, the ministry noted the current low-bond-yield environment across both short and long-dated debt. “The scope for further bond price gains is now limited by the low bond yield level, whilst the scope for price losses in the event of increasing bond yields are considerable,” it said.The committee, which will report in October this year, will review the expected risk stemming from, and return potential of, equity exposure other than the current 60% strategic allocation, and recommend any changes to the target.“In assessing the equity portion, the committee shall, inter alia, consider the fund’s objective, time horizon and size,” the ministry added, “as well as expected outflows from the fund.”The review comes shortly after the Norwegian government was urged to expand the GPFG’s investment remit to include infrastructure and a potentially increased exposure to real estate, currently capped at 5% of fund assets.As a result, an increase in the fund’s equity exposure is far from certain, due to the potential for its real estate exposure to rise and the possible introduction of a standalone infrastructure allocation.The sovereign fund currently accounts for a significant minority of government expenditure, around one in eight kroner spent annually, despite yearly drawdowns being limited to 4% to avoid its depletion.Any change in strategy is unlikely to be implemented for at least a year, as the government said in a statement that it would only address the matter of a revised equity exposure when the fund’s annual report was submitted to Parliament in spring 2017.At the end of September last year, 59.7% of the fund was invested in equities, 37.3% in fixed income and the remaining 3% in real estate.The fund’s current 60% exposure to equities has been in place since 2007, while the 5% target allocation to real estate was announced in 2008.last_img read more

Scope of Norway’s SWF oil divestment shrinks still further

first_imgThe Norwegian finance ministry has approved the plan for the Government Pension Fund Global (GPFG) to divest oil stocks, but the latest plan involves the cull of considerably fewer stocks than those earmarked for exclusion seven months ago.The ministry announced late yesterday: “The decision to phase out upstream oil and gas companies from the GPFG shall apply to companies classified as ‘Oil: Crude Producers’ by the index provider FTSE Russell.” The sub-sector is to form part of the FTSE Global All Cap index after September 2020 following changes to FTSE Russell’s classification system.The finance ministry’s decision followed up parliament’s endorsement of the proposal to omit upstream oil and gas companies from the fund’s benchmark and investment universe, it said. The phase-out — which the ministry and the fund’s manager Norges Bank Investment Management (NBIM) have made clear is aimed at protecting the country’s overall wealth from oil-price risk and not being done for climate reasons — will be made gradually over time, the ministry said.The ministry has taken the advice from NBIM in its letter of 11 September. In the letter, the manager advocated defining the upstream companies to be divested as those contained in the new ‘Oil: Crude Producers’ sub-sector. From NOK300bn to NOK50bn The ministry said that as of mid-September, 95 companies in this new sub-sector were in the fund’s benchmark.These made up about 0.8% of the GPFG’s benchmark for equities, corresponding to about NOK54bn (€5.4bn) at the time, it said, adding that there may be some deviations between the fund’s benchmark index and actual investments.The list of 95 companies compares with the 150 firms the ministry listed back in March as the fund’s equity holdings that were categorised by FTSE Russell as exploration and production companies within the oil and gas sector category.Back in March, NBIM said that according to the FTSE definition, the fund held “Exploration and Production” companies worth approximately NOK66bn at the end of 2018 – corresponding to 1.2% of the fund’s equity holdings.The latest reduction in the scope of the divestment brings the planned investment exit even further from the recommended sell-off of more than NOK300bn (€31bn) of oil and gas equities that was originally proposed in November 2017 by NBIM.The total divestment may now be around the value of the GPFG’s holding in Royal Dutch Shell, which was worth NOK51.3bn at the end of 2018.The upcoming classification “Oil: Crude Producers” was defined by FTSE Russell in July as “companies engaged in the exploration for and drilling, production, and supply of crude oil on land”.Firms primarily exploring and drilling for oil and gas in offshore areas are included in a separate category.The finance ministry said it had now sent a letter to Norges Bank with suggested specific changes in the management mandate for the GPFG, and outlined how the unwanted exposure would be shed in practice.“By using the index provider’s classification, the GPFG’s benchmark index and investment universe will continuously be delimited towards upstream oil and gas companies, including corporate events, new listings and new information on or changes in companies’ activities over time,” it said.last_img read more

Butler’s Assistant Basketball Coach

first_imgLaVall Jordan, Butler’s new head coach, did not take long to upgrade his basketball staff at Butler University.  The 38-year old Jordan was assistant coach at Michigan with Jeff Meyer.  At the age of 63 Meyer is a seasoned coach and great recruiter as well as a developer of young talent.Jordan and Meyer are friends from their days at Michigan.  This should bode well for the Butler Bulldogs immediately.  It shows how far Butler has come as a Division I basketball power.  They got an assistant coach to leave the Big Ten.  This happens normally when an assistant takes a head job, but in this case Meyer is just switching his duties from Michigan to Butler.last_img read more

Last weekend to enjoy ice skating downtown

first_imgBatesville, IN—This upcoming weekend will be the last weekend for the downtown iceless ice skating rink. It will be open the following hours:Friday 5-9 pmSaturday 12-6 pmSunday 12-5 pmLocal Girl Scout and Boy Scout Troops will be manning the rink this weekend as fundraisers for their organizations. Weather should be perfect as the forecast currently says sunshine and mid-to-upper forties!last_img

GBA/Bris Promotions

first_imgNuff Cuff’ expected tonight in Guyana versus Suriname amateur boxing cardBy Michael DaSilvaTHE National Gymnasium on Mandela Avenue is expected to come alive tonight from 19:00hrs when the Guyana Boxing Association (GBA) in collaboration with BrisMac promotions stages an international amateur boxing card featuring boxers from the Dutch Republic of Suriname and the English speaking host, Guyana.Addressing members of the media yesterday at the Windjammer Hotel in Kitty, Georgetown, GBA’s president, Steve Ninvalle,welcomed the Dutch visitors and noted that the GBA and the Suriname Boxing Association has been very good friends over the years and both countries are eager to develop the sport in the region.According to Ninvalle, invitations were also extended to St. Marteen, St. Lucia, and Trinidad and Tobago Boxing Associations, but for reasons unknown, these three islands will not be a part of the one night championship.Ninvalle stated that four boxers from the Dutch Speaking Republic will be coming up against four of Guyana’s top amateur fighters and it will be interesting to see what will be the outcome.The GBA president said when Guyana visited Suriname last year, the Guyanese won most of the fights and it will be interesting to see how the Surinamese will respond here tonight.All in all, there will be 15 fights on tonight’s card,which according to Ninvalle,will commence at 19:00hrs sharp and though there will be 11 all-Guyanese bouts, Ninvalle assured that these bouts promise to be very entertaining.Speaking on behalf of the Suriname Boxing Association (SBA), its president Remie Burke thanked the GBA for inviting the SBA to participate in the tournament which, according him (Burke) will only serve to help the SBA to develop their boxers’ potential. Burke also stressed the need for other CARICOM countries to join forces in making the CARICOM region more powerful in the sport of boxing.Burke said this tournament will definitely assist his association in returning the sport to its former glory and make it a force to be reckoned with.Burke acknowledged that Guyana is far more advanced than Suriname in the discipline of boxing and alluded to the fact that it will be a learning experience for his association and boxers.The SBA president said this is a learning experience and his boxers will return to Guyana in the future to learn more.The SBA’s secretary, Ricardo Morris, in very brief remarks thanked the GBA for inviting the SBA to field a team of boxers for tonight’s competition and like Burke, said the exposure will be a learning experience for both the SBA as well as its boxers.Meanwhile, co-sponsor of the event,Alfred McDonald Morrison,stated that this is the first event that himself and the other co-sponsor, Seon Bristol, is staging here in Guyana, but there are more such events planned for the future and it is his hope that these planned events will bring out the best in Guyana and the rest of the CARICOM Region.Bristol for his part thanked the local business community for supporting boxing and stated that their main objective is to enhance the sport locally and regionally.Bristol thanked the Surinamese contingent for coming to Guyana and also thanked the local business community for supporting the event.Special mention was made of Ansa McAl, Windjammer Hotel, White Castle Fish Shop, Nigel Pile,and Ramesh Sunich of Trophy Stall in Bourda Market.last_img read more

Men’s hockey: Eaves says Jurusik is goaltender going forward

first_imgThe scoring came early and often over the weekend in New England, but it was much to the chagrin of the Wisconsin men’s hockey team as they fell to both Boston College and Boston University.Boston College established the tone early Friday night, opening the action with a goal 12 seconds into the contest. The Badgers didn’t find the back of the net and suffered their first shutout of the 2015-16 campaign.Maybe the most interesting subplot of the weekend was head coach Mike Eaves’ decision to pull senior goaltender Adam Miller in favor of freshman Matt Jurusik, with the Badgers trailing 2-0 in the first period Friday night. Jurusik would go on to stop 40 shots on goal against Boston University Saturday, the most by a Wisconsin rookie since 2001.Eaves gave his rookie goaltender a vote of confidence at his weekly news conference Monday.“We lost the game, but there were several things that stood out, and that was one of them,” Eaves said. “You know, that’s the kind of growth that we’re hoping to find with our young group as we get going, so because of that fact, you know, we go into this weekend knowing Friday night that young Matty is going to be our goaltender.”While the Badgers (0-2-2) dropped Saturday’s contest 4-1 to Boston University, there were some silver linings, Eaves said, including the continuation of early-season penalty kill success. UW thwarted 10 of Boston College’s 12 power plays, pushing the Badger’s season penalty kill success to 83 percent.“I thought our guys did a really good job,” Eaves said. “The blessing of having all those penalty kills is we got a chance to work on it live and in game situation, which is the best teacher so we did a lot of good things there, and we will be able to use that as we move forward as well.”UW will look to build upon the small successes from their New England trip when they face off against the Ferris State Bulldogs in a weekend showdown this Friday and Saturday in Big Rapids, Michigan.last_img read more

Van Basten distances himself from proposal to get rid of offside

first_imgFIFA technical director Marco van Basten’s distanced himself from his proposal to get rid of offside.The former World Player of the Year was speaking before the Confederations Cup in Russia.Players pressuring the referee, and goalkeepers holding the ball for longer than six seconds were highlighted as priorities. Photo © Pixabay Van Basten says scrapping some of football’s rules isn’t on his current agenda.last_img

Wellington Police Notes: Thursday, Feb. 12, 2015

first_imgWellington Police notes for Thursday, February 12, 2015•10:25 a.m. Officers took a report of an animal complaint in the 200 block N. Elm, Wellington.•10:55 a.m. Officers investigated identity fraud and theft by a known suspect(s) in the 1100 block E. 16th, Wellington.•11:20 a.m. Stuart A. Erwin, 32, Wellington was arrested for three counts of forgery, four counts of theft, one count of identity theft and conspiracy.•2:36 p.m. Jacob D. Dedmon, 23, Belle Plaine, was issued a notice to appear charged with expired registration.•3:35 p.m. Non-Injury accident in the 400 block N. Washington, Wellington involving a vehicle operated by Steven G. Ybarra, 59, Wellington and a fixed object/drive-thru deposit box owned by Panhandle Federal Credit Union, Wellington — occurred at 11:45 a.m.•3:40 p.m. Amber D. Dorsey, 28, Wellington was arrested for three counts of forgery, four counts of theft, one count of identity theft and conspiracy.•4:40 p.m. Officers investigated duty of driver report an accident by a known driver in the 1700 block E. 16th, Wellington.•6:27 p.m. Steven S. Erickson, 47, Anthony, was issued a notice to appear for disobeyed traffic signal.•8:37 p.m. Officers investigated driving while license is suspended and defective headlights in the 1300 block N. A, Wellington.•8:44 p.m. Kellie R. Fumich, 31, Wellington was issued a notice to appear for driving while license is suspended and defective headlights.last_img read more

WHS Daily Bulletin: Classic Movie Club showing Bonnie and Clyde on Tuesday

first_imgSubmitted to Sumner Newscow — Today’s Wellington High School bulletin for Monday, Oct. 12, 2015:Monday•JV football at Wichita Collegiate, 6 p.m.Tuesday•Volleyball at Welington, 5 p.m.WednesdayNothing scheduled.Thursday•Cross Country at El Dorado, 4 p.m.•C-team volleyball at Augusta, 5 p.m.Friday•State tennis at Winfield, 11 a.m.•Varsity football at Rose Hill, 7 p.m•All School play.Saturday•Volleyball at Clearwater, 9 a.m.•State tennis at Winfield, 9 a.m.•All school play.Today’s Lunch– Pizza, Tossed Salad with Romaine, Bread Stick, Marinara Sauce, Applesauce and Milk.Tuesday’s Lunch — Ham and Cheese Sandwich, Potato Wedges, Broccoli Florets, Fresh Grapes, Chocolate-Chocolate Chip Cookie and Milk.Today’s News•Classic Movie Club will be showing the movie “Bonnie and Clyde” on Tuesday October 13 at 3:30 p.m. in room 205. If you have considered joining, now is the time to come. See a classic movie with friends and have fun!!•Attention Class officers: If you want any of your float decorations that were used for the dance, please see Ms. Vaughn. Any decorations that are not claimed by Friday afternoon will be thrown away.•Attention Stuco Members: There will be a Stuco meeting this Wednesday in the auditorium at 7:15.•Leadership would like to thank all involved in the Haunted Maze and Movie. Especially to the advanced drama class for their assistance and expertise.•ATTN JUNIORS:  The Kansas Star Casino has purchased ACT vouchers for all current Juniors.  If you are planning on taking the ACT stop by the counseling office for your voucher.•Students interested in going to Spain in June of 2017- Please pick up packet information from Mrs. Groom.•US Sgt. Justin Smith will be here during lunch on Monday, October 19th.•September 14th through November 11th all student-athletes 7th through 12th grades, will be given the opportunity to attend Core-Strengthening Yoga on Monday and Wednesday mornings from 6:40-7:15 at the middle school gym.•Football players- you can turn in your $2 in the office for the football signs.Guidance office news:College visits during lunch:Thursday, Oct 15- Baker UniversityFriday, Oct 16- University of Kansas.Monday, Oct. 19 – Butler County CC.Thursday, October 22, Friends UniversityMonday, Nov. 2- Hutchinson CC.Fun Fact of the Day:According to researchers, Monday mornings are so depressing that on average, humans don’t crack a smile until 11:16 a.m.last_img read more