![\"\"](\"https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2023\/02\/Chart-of-the-week-0302-300x140.png\")
<\/p>\nFor the first time in more than a dozen years, U.S. pension funds have returned to surplus. These pension funds have to cover pension obligations over decades. The present value of these commitments constitutes their liabilities. To do this, they invest their assets in the financial markets.<\/p>\n
Last year saw the value of their investments fall by 18%, in line with the sharp decline in equity and bond markets. However, at the same time, the effect of rising interest rates on the discount rate reduced their liabilities by 27%. This discount rate, which roughly corresponds to the yield to maturity of investment grade corporate bonds, rose from 2.8% to 5.2%.<\/p>\n
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This situation will probably have an impact on the investment strategy of pension funds. Indeed, a ratio below 1 encourages pension funds to invest in equity markets or in offensive credit to try to make up for this deficit through good performance. On the contrary, pension funds with a surplus can build a less risky portfolio that covers their needs. In this context, they could therefore reduce their equity portfolio in the near future.<\/p>\n
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***<\/p>\n
The opinion expressed above is dated February 3, 2022 and is subject to change.<\/p>\n
See also: https:\/\/latribune.lazardfreresgestion.fr\/en\/fixed-income-in-2022\/<\/p>\n
***<\/p>\n
This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS. LAZARD FRERES GESTION \u2013 a simplified joint stock company with share capital of \u20ac14,487,500 \u2013 Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES \u2013 75008 PARIS, FRANCE<\/p>\n","protected":false},"excerpt":{"rendered":"
Chart of the Week For the first time in more than a dozen years, U.S. pension funds have returned to… <\/p>\n","protected":false},"author":101016,"featured_media":19070,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[98,148],"tags":[1940,1971],"class_list":["post-19076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-chart-of-the-week","tag-inflation-en","tag-usa-en"],"yoast_head":"\n