Article

Cashflow-Driven Investing outlook – Q4 2021

5 November 2021
View of London - of St. Paul's Cathedral and the River Thames

UK Defined Benefit scheme funding improved for the third consecutive quarter, by 0.6% to 106.4% on average.1

With funding ratios remaining at their highest since 2008, we expect more de-risking activity to protect recent gains, as schemes progress towards their long-term objective.  

However, inflation remains a worry - the wide dispersion of inflation views leads us to expect higher than usual volatility of interest rate and inflation pricing, increasing the value of hedging within portfolios. 

In our latest outlook we discuss:

  • The de-risking outlook for Defined Benefit pension plans
  • Our current views on global market conditions and key factors influencing a CDI (Cashflow-Driven Investing) strategy
  • The outlook for key fixed income, private markets and alternative strategies
Download the Q4 CDI outlook

Footnotes

  • 1 Source: Pension Protection Fund (PPF S179 basis), September 30, 2021.

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

     

    Alternative investment products, including private equity, may involve a higher degree of risk, may engage in leveraging and other speculative investment practices  that may increase the risk of investment loss, can be highly illiquid, may not be required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual portfolios, often charge higher fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager.  There is often no secondary market for private equity interests, and none is expected to develop.  There may be restrictions on transferring interests in such investments.

Important information

  • Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. 

     

    Issued by Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.