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Author Archive for David Rae


Are you where you need to be?

The last twelve months have seen equity market valuations rise and bond yields decrease against a backdrop of political surprises. There is no magic crystal ball – but as investors, we are constantly required to ask ourselves: ‘is my portfolio best positioned for the future?’.   Manage risks, not returns   It was the Dean

November 9, 2017 Categories: Investment Strategy, Multi-asset

Bulk Annuities – 2017 NOT the year of the buy-out?

A couple of articles on the bulk annuity market caught my eye this week and reminded me of a great blog post authored by my Seattle based colleague, Bob Collie back in October, “What about the 98% of plans NOT doing annuity buyouts?”. Wednesday’s Financial Times contained an article* predicting a big recovery in the

Jan 6, 2017 Categories: Investment, Markets

Where to now that we have a Brexit vote?

Later this morning, Jenny Watson, the Chair of the Electoral Commission, will conclude the UK referendum on EU membership by announcing the result in favour of a decision to leave the EU. This historic moment brings to an end the referendum process but simply heralds a new chapter of uncertainty for the UK and the

Jun 24, 2016 Categories: Market Updates, Markets

There are only two things people are writing blog posts about this week – Leicester City or Brexit

“I don’t like football”. There I’ve said it. (You see where this might be going). My eldest son, however, is big into his football, watching, playing, and talking about it. So my Saturday mornings are spent at the side of a football field pretending to concentrate and offer the occasional words of encouragement. Last weekend

May 6, 2016 Categories: Uncategorized

Be cautious trusting correlations

I was discussing with colleagues recently the market’s change in near term focus from the possibility of a Grexit to the evolution of Fed monetary policy. The conversation moved to a discussion of the risks of relying on traditional diversification when we know that correlations are neither stable nor easily predictable. This reminded me of

Excitement x 3 – the election, bond sell-off, and Legoland…

After the excitement of the Election, life returns to normal for the voting public, including pension trustees. Normality for trustees should include having a clear plan for using bond market volatility as an opportunity to de-risk. One of the implications of a General Election is that thousands of public buildings across the country have to

What exactly do you do all day?

There’s a running joke in the Rae household about what I actually do at work. My eldest now thinks I play Match Attax (don’t ask), my middle thinks I’m a builder and my youngest wishes I was Sir Topham Hatt (*makes a mental note to go to the gym more). The reality is perhaps less

Mar 26, 2015 Categories: Investment Strategy, Liability Hedging

Riding the waves of the bond markets

Recent movements in the gilt market have reinforced the importance of ensuring that the design and implementation of a hedging strategy remains flexible enough to withstand market realities. Over the last month, we’ve seen the yield on the 30 year gilt move from 2.40% on 8 January all the way down to 2.08% on 30

Feb 18, 2015 Categories: Investment Strategy, Liability Hedging

To Autumn – David Rae shares his thoughts on the Autumn Statement

  As we come to the end of this season of mellow fruitfulness The Autumn Statement and the Office for Budget Responsibility (OBR) fiscal forecasts will provide further colour on the state of the economic recovery. Given the recent downward revisions of medium term growth forecasts from the Bank Of England, we can expect similar

Dec 2, 2014 Categories: Uncategorized

Dynamically manage your Z spreads? For how much longer?

Dynamically manage your Z spreads? For how much longer? An increasingly common feature of liability hedging portfolios has been the smart use of different types of interest rate and inflation exposures. It is possible to hedge liability interest rate and inflation risk using gilts and index linked gilts or combinations of interest rate and inflation

Nov 27, 2014 Categories: Investment Strategy, Liability Hedging

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