Building retirement resilience

Building retirement resilience

A new market regime of economic uncertainty continues to impact retirement portfolios and participants. This regime may require evolving plan menus to prepare for the road ahead.

Investment themes


Navigating a new market regime

The shift from defined benefit to defined contribution in the 1980’s coincided with a four-decade investment era of largely stable activity and inflation. We believe that a new regime of greater uncertainty is playing out.


Resilience amid uncertainty

Volatility from inflation and policy tightening is reverberating through financial markets. At the same time, the relationship between stocks and bonds has become more dynamic as policymakers seek to combat inflation.


Approaching a new era

Structural changes are not just from the long tail of the pandemic, but aging populations and geopolitical tensions may prolong inflation and impact economic output. This new era is not going away, in our view.


Take action

Building resilience may require plan sponsors to examine retirement plan menus for 2023 and beyond. Consider these portfolio actions:

Seek consistent alpha
Seek consistent alpha

Seek consistent alpha

The need for additional returns from active management is greater than in prior years as inflation is eroding many participants’ retirement savings. Active strategies that are low-cost and seek to deliver consistent, incremental alpha may help solve potential savings challenges in retirement plans.

Re-think fixed income
Re-think fixed income

Re-think fixed income

It's important to consider rethinking bond portfolio construction for an environment with inflation and higher interest rates. More flexible strategies that diversify across broader exposures may capture higher yields and reduce risk in a potentially volatile bond market.

Withstand volatility
Withstand volatility

Withstand volatility

With market volatility expected to continue, participants will need solutions that provide greater downside protection to stay invested. Consider solutions that offer lifetime income and options that may be resilient in down markets, like value-oriented strategies.

Alternative ret streams
Diversify return streams

Diversify return streams

In today's market, finding alternative ways to diversify traditional equity and bond strategies may be beneficial to retirement plans and participants. Unlock the potential for diversification through differentiated investment strategies like tactical asset allocation.

Reassess the core menu

In this new environment, plan sponsors may benefit from reviewing their core investment menu to help participants meet their needs.
Diversification icn

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