Woman in gym

Building a modern institutional portfolio

Tackle the challenges of being an institutional investor in 2021

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Watch our video to discover how an index approach to portfolio construction could make it easier to manage your portfolio and rise to the challenge of being an institutional investor in today's world.

• Pension funds and insurers play a critical role in securing the financial well-being of billions of people around the world. But it isn’t easy being an institutional investor today. Low interest rates, higher liabilities, regulatory demands – it all adds to the complexity. And yes – investors are doing a lot to deal with these challenges. But is it enough?

• I’m Kirst Kuipers, and I’ll explain how an index approach to portfolio construction may help you to increase returns, enhance risk diversification, lower costs, to improve liquidity, enhance sustainability…. and to make it easier to manage your portfolio.

• Low interest rates have increased the value of liabilities while returns on fixed income in matching portfolios have gone down
• In addition, higher life expectancy has also increased liabilities even further
• Meanwhile, regulatory emphasis on transparency and efficiency is accelerating the need to reduce costs
• Last but not least, sustainability has become the standard across Europe with investment behaviour increasingly being scrutinised by regulators, clients and the general public at large

• ETFs are a great tool to help tackle these challenges. They are liquid and transparent and offer easy and diversified access to a wide range of different asset classes
• And you can implement them in a barbell strategy
• In this approach you build the core of your portfolio with low cost index products

• You can then add private investments or alternatives for convictions that could offer additional returns, but are harder to access, less liquid, or may not offer an index product to capture their potential upside
• This approach could increase the overall return of your portfolio, while making it easier to manage.

• Market turmoil during the covid crisis has highlighted the need for liquidity and shown the resilience of ETFs in volatile markets
• Not surprisingly, more and more institutional investors are using ETFs in their portfolios
• If you would like to know more on this, please give us a call

• Pension funds and insurers play a critical role in securing the financial well-being of billions of people around the world. But it isn’t easy being an institutional investor today. Low interest rates, higher liabilities, regulatory demands – it all adds to the complexity. And yes – investors are doing a lot to deal with these challenges. But is it enough?

• I’m Kirst Kuipers, and I’ll explain how an index approach to portfolio construction may help you to increase returns, enhance risk diversification, lower costs, to improve liquidity, enhance sustainability…. and to make it easier to manage your portfolio.

• Low interest rates have increased the value of liabilities while returns on fixed income in matching portfolios have gone down
• In addition, higher life expectancy has also increased liabilities even further
• Meanwhile, regulatory emphasis on transparency and efficiency is accelerating the need to reduce costs
• Last but not least, sustainability has become the standard across Europe with investment behaviour increasingly being scrutinised by regulators, clients and the general public at large

• ETFs are a great tool to help tackle these challenges. They are liquid and transparent and offer easy and diversified access to a wide range of different asset classes
• And you can implement them in a barbell strategy
• In this approach you build the core of your portfolio with low cost index products

• You can then add private investments or alternatives for convictions that could offer additional returns, but are harder to access, less liquid, or may not offer an index product to capture their potential upside
• This approach could increase the overall return of your portfolio, while making it easier to manage.

• Market turmoil during the covid crisis has highlighted the need for liquidity and shown the resilience of ETFs in volatile markets
• Not surprisingly, more and more institutional investors are using ETFs in their portfolios
• If you would like to know more on this, please give us a call

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Reliance upon information in this material is at the sole risk and discretion of the reader. The material was prepared without regard to specific objectives, financial situation or needs of any investor.

 

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, and estimates of yields or returns. No representation is made that any performance presented will be achieved by any BlackRock Funds, or that every assumption made in achieving, calculating or presenting either the forward-looking information or any historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

 

The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.

 

In the U.S., this material is for Institutional use only – not for public distribution.

 

The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging/developing markets or smaller capital markets.

 

FOR INSTITUTIONAL, FINANCIAL PROFESSIONAL, PERMITTED CLIENT AND WHOLESALE INVESTOR USE ONLY. THIS MATERIAL IS NOT TO BE REPRODUCED OR DISTRIBUTED TO PERSONS OTHER THAN THE RECIPIENT.

 

BLACKROCK is a trademark of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.