We are pleased to share with you the link to the latest interview for Russ Kamp with Fox Business. In this interview, Russ speaks to the continued mismatch of assets and liabilities and the impact that this mismatch has on funded status, especially given the decline in interest rates throughout 2014. We hope that you enjoy the conversation.
Here is the link: http://www.foxbusiness.com/economy-policy/pension-crisis/index.html
Please don’t hesitate to reach out to us if we can be of any assistance to you.
We are pleased to share with you the KCS Third Quarter update. In this edition you will find our insights on the global markets and the performance of assets and liabilities, while also reporting on our team expansion and continuing support of the industry through conference appearances. Enjoy! Please don’t hesitate to reach out to us if we can help you in any way. Here’s the link: http://www.kampconsultingsolutions.com/images/kcs3q14.pdf
Amazingly, bond yields are plummeting for US debt. The 10 year yield is at 1.96% this morning, having closed at 2.52% on 9/30/14. We have been stressing to plan sponsors throughout the last two years that they convert their fixed income exposure into a beta portfolio, and to get away from forecasting rates. As you know, most fixed income analysts were calling for higher rates at the beginning of the year. We, at KCS, have been calling for falling rates. But, we also stressed that we didn’t want to be in the interest forecasting game either.
Our strategy is to create a beta portfolio that cash matches near-term liabilities. With this approach,we remove interest rate sensitivity, improve liquidity, extend the investing horizon for the alpha assets, and begin to de-risk the plan through a glide path to full funding. The beta / alpha portfolio would have stabilized the asset / liability mismatch found in most DB plans, while helping plans avoid the chase for yield, by dipping down in quality in the high yield and bank loan segments, which have come under a ton of pressure.
We are ready to help you – call us!