During a holiday earlier this year a friend of mine
complained that since she started to contribute to her
companay’s pension scheme, which is made up of
primarily long-only equity investments, the value of the fund
had gone down significantly.
The view that a traditional portfolio of investments made up
of equities and bonds will eventually create absolute returns
net of fees in the long-term has gone out of the window since
the global financial crisis especially now the FTSE, the UK
index, is about 1000 points lower than it was 10 years ago.
This development is significant. The preceding decade of
decadence fueled by debt has gone. Governments are virtually
broke and generous company final salary schemes are on the way
out – which means that more and more people will have
to look after their own investment decisions to fund their
Gaining alpha and absolute...