AUGUST 12, 2024 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
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Large-cap funds led changes to 401(k) lineups in a busy year
Investing
Gold is enjoying a
bright, shining moment
U.S. corporate plans nearly double the lineup changes in 2023 compared to 2022 B y ROB KOZLOWSKI
Amid geopolitical turmoil, institutional investors are seeing the appeal of the traditional inflation hedge B y CHRISTOPHER MARCHANT Institutional investors are looking for a Midas touch when it comes to their portfolios, with greater recent interest in gold among pension funds. However, it’s not simply mythological levels of wealth they are seeking. It’s more a matter of valuing the commodity’s well-known role as an inflation hedge
Defined Contribution
and its role in protecting portfolios against geopolitical turmoil, such as the potential for upcoming volatility associated with the U.S. presidential election in November. In June, the A$223 billion ($143.2 billion) Future Fund, Melbourne, confirmed plans to add exposure to gold within its portfolio. The glittering asset was trading at
$2,326 an ounce on July 1 — up 12.5% vs. Jan. 1, when one ounce was priced at $2,068. A June report by the World Gold Council showed that institutional investors are at least interested in getting in on gold’s rally, with at least 85% of North American institutional investors and financial advisers now having some holding in the product. Another big investor, the ¥254.7 trillion ($1.58 trillion) Government Pension Investment Fund, Tokyo, in March called for information on asset classes that it does SEE GOLD ON PAGE 23
Well over 100 U.S. corporate 401(k) plans made changes to their investment option lineups in 2023. That's nearly double the number that disclosed changes the previous year, with 401(k) plans in 2023 saying changes to active domestic large-cap growth equity options dominated. The number of plans WIDE PERFORMANCE that made changes in 2023 DISPERSION: Callan’s Greg was up significantly from Ungerman the prior year. Pensions & Investments compared 819 corporate 11-Ks filed with the Securities and Exchange Commission between May 14 and June 28 with similar filings in 2022. For 2023, slightly less than 15% of 11-K filings showed retirement plans that made at least one investment option change during the year, with the majority affecting individual active equity options, P&I's analysis of recently released 11-K filings showed. Last year's 847 corporate 11-K filings found that 65 U.S. corporate 401(k) plans, or just under 8%, added or SEE CHANGES ON PAGE 25
SPECIAL REPORT ARTIFICIAL INTELLIGENCE
Pension Funds
Colorado PERA CIO touts internal management as competitive edge
How large hedge funds are navigating the AI revolution B y LYDIA TOMKIW The boom in generative artificial intelligence is both new and old for some of the world’s largest hedge funds. Many have had teams focused on machine learning for years, but are now trying new use cases. Pensions & Investments spoke with AQR Capital Management, Balyasyny Asset Management and Man Group about how they are thinking about AI, where AI staff fit in their firms, the skill sets they are looking for and how AI is being applied.
B y ROB KOZLOWSKI
MORE ON AI AI is making a big impact in bond, equity investments. Page 18 Greater energy demands are fueling investment. Page 19 ESG investors are addressing an AI conundrum. Page 20
Over the past several years, AI has broadly transitioned from the back-office technology domain at asset managers, to a focus on “actionable insights that impact the SEE HEDGE AI ON PAGE 21
‘HUMAN AUGMENTATION’: Man Group’s
Gary Collier
Amy McGarrity, chief investment officer of the Colorado Public Employees’ Retirement Association, considers the pension fund’s emphasis on internal money management a significant competitive advantage over its peers.McGarrity has a staff of about 60 people across all asset classes, administration and operations who have the responsibility of managing most of its global equities asset class, and the entirety of its fixed-income portfolio in active management.
SOUND BITE William Blair’s Stephanie Braming:
‘The joy of investing is great, but it’s always bringing it back to the people you serve.’ Page 2
“We believe that is a competitive advantage for Colorado relative to our peers and relative to other state pension plans,” said McGarrity. “Every year we run an estimate of what those cost savings are, and last year was $65 million.” McGarrity said what has also helped considerably is the strong support of PERA’s board and a compelling compensation package, and what also helps is the attractiveness of the Denver metropolitan area as an appealing place to live. “I think we have a combination of SEE MCGARRITY ON PAGE 27
Eddy Awards open for submissions P&I’s recognition program for the best in investment and financial education campaigns is open for submissions. Page 2