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July 22, 2021

CONSENSUS LACKING ON RETIREMENT SOLUTIONS

While leading-edge clients cite implementing a retirement tier as a top priority, there is little consensus among consultants regarding retirement income solutions, says the ‘2021 Pimco Canada DC Consulting Study.’ Consultants are generally divided between moving out, actively retaining, and indifference about retiree assets. As well, after capital preservation objectives and transferability, there is no clear consensus on key retirement income solution features. Retirement income solutions with payout strategies ranked as the top products, while guarantees (both in-plan and out-of-plan) ranked low. Consultants also have varying views on which services they expect to grow the most over the next three years. While the survey found there is little differentiation among consultant services currently offered, manager selection and monitoring (55 per cent), governance reviews (55 per cent), and evaluating financial wellness programs were the services with the highest expected growth. They are also focused on organic expansion with expanding up and down market the top-two priorities (45 per cent).

July 22, 2021

SUSTAINABLE INVESTING INDUSTRY GROWS

The sustainable investing industry grew to more than US$35 trillion in 2020 as it transitioned to focus on the short- and long-term impacts generated by investors shows a review by the Global Sustainable Investment Alliance (GSIA), Sponsored by RBC Global Asset Management and Robeco, it also reveals that Canada recorded the largest proportional gain in ESG assets between 2018 and 2020, with a 48 per cent jump to $2.4 trillion. Canada’s growth in sustainable or socially responsible investing is due to support from regulatory and policy drivers, industry collaboration such as the ‘Investment to Address Climate Change charter,’ and customer drivers including the strong interest in sustainable investment mutual funds and ETFs. Canada now has the highest proportion of sustainable investment assets at 62 per cent, well ahead of second-placed Europe at 42 per cent.

July 22, 2021

FIERA PROVIDES DISCOUNT RATE CURVES

Fiera Capital Corporation has expanded its agreement with the Canadian Institute of Actuaries (CIA) to provide discount rate curves under IFRS 17 accounting to CIA members. Its ‘CIA IFRS 17 Market Curves and Reference Curves’ enables pension plan sponsors to select the appropriate accounting discount rate to value pension and other post-employment benefit plan liabilities and actuaries in life, health, and property and casualty insurance to use fair value and market-consistent approaches to the liability valuations of insurance contracts. It has partnered with the CIA to produce a monthly discount rate curve for 10 years.

July 22, 2021

INVESTORS LACK AWARENESS OF LIQUID FUND CHALLENGES

Investors still lack awareness of the challenges and risks of liquid alternative funds and often fail to form realistic expectations for them, says Morningstar’s ‘2021 Global Liquid Alternatives Landscape.’ Although these funds are still relatively young, they had nearly $500 billion in assets globally as of May 2021. However, chasing performance has been rampant, causing wild swings in asset flows in and out of the asset class. It says they were borne out of the global financial crisis and have produced largely disappointing returns compared with traditional market benchmarks. The onset of the global pandemic and effects of central bankers’ actions have pushed these strategies back into the spotlight. The average liquid alternative fund as represented by the Credit Suisse Liquid Alternative TR USD Index was up 6.2 per cent for the first half of 2021, just over half the 15.2 per cent increase of the S&P 500. Liquid alternatives’ promise of positive, uncorrelated returns may become more valuable if stock and bonds struggle to offer the same diversification benefits and returns in less accommodating market regimes.

July 22, 2021

MURRAY SPEARHEADS ESG

Anna Murray is managing director and global head of ESG (environment, social, and governance) at SLC Management. In this new role, she will spearhead its ESG strategies and aligning its ESG reporting and sustainability efforts with its parent company, Sun Life. She is co-chair of the United Nations Environment Programme Finance Initiative (UNEP FI) Investment Committee Property Working Group and founder of the non-profit Young Women in Energy.

July 22, 2021

CPPIB PARTICIPATES IN FUNDING

Intel Capital has co-led an investment in Untether AI Corp., a Toronto, ON-based startup that develops high-performance chips for artificial intelligence programs. The Canada Pension Plan Investment Board (CPPIB) also participated in the funding round. Untether plans to use the funding for product development and market expansion. A pandemic-induced global chip shortage is likely to improve in 2022 with strong growth, fed by increasing