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The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.
Current analysis does not guarantee future results.
Left display: Gilts and T-bill data as of June 30, 2022; pension liabilities estimate as of September 6, 2022. Right display: DB pension liabilities data as of June 30, 2022, US Treasury data as of October 12, 2022 and IG (investment-grade) corporate data as of April 30, 2022.
Source: Federal Reserve Economic Data, Fitch Ratings, Securities Industry and Financial Markets Association, United Kingdom Debt Management Office, XPS Group and AllianceBernstein (AB)
For illustrative purposes only.
As of September 30, 2022. Analysis assumes that a UK DB plan is 70% funded on a gilt-matching basis as of March 31, 2015. Liabilities are assumed to move 30% in line with the FTSE All Stocks Gilt Index and 70% in line with the FTSE All Stocks Index Linked Gilt Index. The investment strategy is assumed to be 40% invested in global equities (represented by the MSCI World Index 50% hedged to GBP) and 60% in gilts that match the plan’s liabilities. The LDI hedge is based on buying a swap to match the remaining unhedged liabilities at the ratios shown. The strategy assumes monthly rebalancing of both the physical asset allocation and the LDI hedge ratio—with the swaps settled and restruck at the end of each month. No allowance is made for fees.
Source: FTSE, MSCI and AB
Past performance does not guarantee future results.
This chart illustrates the capital growth of £100 invested on March 31, 2015 in the AllianceBernstein 2020–2022 Retirement Strategy Target Date Fund and is net of fees. The conversion to an annuity is by reference to an annuity purchased with the capital available for such an investor, scaled to £100 per month as of December 31, 2015. The reference annuity is for a healthy, non-smoking 65-year-old living in Chelmsford, UK, is level in payment and has an attaching 50% reversionary annuity on the death of the policyholder. Annuity rates are the observed best-in-market rates by AB at the end of each month for a purchase amount of £20,000.
As of September 30, 2022
Source: AB
Past performance does not guarantee future results.
December 31, 1851, through June 30. 2022
Source: Global Financial Data, Thomson Reuters Datastream and AB
Historical analysis and current estimates do not guarantee future results.
*2022 estimate prorates the 2019 stock and bond allocation with year-to-date returns of S&P 500 and US 10-year government bonds, respectively, and assumes no change in the alternatives allocation.
As of October 12, 2022
Source: CME, Datastream, McKinsey and AB
The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.
Inigo Fraser Jenkins is Co-Head of Institutional Solutions at AB. He was previously head of Global Quantitative Strategy at Bernstein Research. Prior to joining Bernstein in 2015, Fraser Jenkins headed Nomura's Global Quantitative Strategy and European Equity Strategy teams after holding the position of European quantitative strategist at Lehman Brothers. He began his career at the Bank of England. Fraser Jenkins holds a BSc in physics from Imperial College London, an MSc in history and philosophy of science from the London School of Economics and Political Science, and an MSc in finance from Imperial College London. Location: London
David Hutchins is a Senior Vice President and Head of AB's Multi-Asset Solutions business in EMEA. He is responsible for the development and management of multi-asset portfolios for a range of clients. Hutchins joined the firm in 2008 after spending two years at UBS Investment Bank, where he was responsible for devising and delivering innovative capital markets risk-management solutions for pension schemes. Prior to that, he spent 13 years at Mercer, where he served as a European principal and scheme actuary, providing trustee and corporate advice to a range of UK pension funds and their sponsors. Hutchins holds a BSc in mathematics and a PGCE from the University of Bristol. He has chaired the Investment Management Association's Defined Contribution Committee and formerly chaired the defined contribution industry working group for the UK government's "defined ambition" project. Hutchins is a Fellow of the Institute and Faculty of Actuaries. Location: London