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European and North American pension funds, unhappy with investment returns, are taking a close look at the performance of their money managers, a recent survey reveals.

Bfinance’s survey of 63 North American and European pension funds finds 62% of respondents have reviewed their roster of external managers in the past six months, resulting in changes to the fund managers overseeing portfolios worth an average 7% of assets.

Chief among the reasons for change was underperformance, cited by 69% of respondents, followed by strategic or tactical asset allocation adjustments.

Twenty-eight percent of respondents are planning to hike equities allocations over the next year, while 20% plan to reduce their exposure to stocks. Fixed income is far less popular, with 23% of plans expecting to cut allocations over the year, while 18% expect an increase.

The survey also finds riskier assets are gaining favour, with 23% of respondents planning to increase allocations to real estate over the next 12 months, while only 8% predict a cut.

Sixteen percent of respondents plan to increase their target allocation to commodities, while 13% are looking to private equity.

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Claymore rolls out high-yield bond ETF

Claymore Investments has launched the Claymore Advantaged High Yield Bond ETF, designed to provide investors with exposure to the Barclays Capital U.S. High Yield Very Liquid Index.

This index consists of non-investment grade, fixed-rate, taxable corporate bonds, denominated in U.S. dollars. The bonds in the index are rated as high-yield, with credit ratings topping out at Ba1 (Moody’s) or BB+ (Standard & Poors and Fitch).

The bonds must also have at least one year remaining before they mature, and have $600 million or more of outstanding face value.

“High Yield bonds are a very important part of an investment portfolio for their income and diversification benefits and CHB is a simple, low cost way to obtain hedged exposure to high yield bonds on a tax-efficient basis, making it an optimal investment for income-focused investors,” said Som Seif, president and CEO of Claymore.

The Claymore ETF will hedge the U.S. dollar exposure.

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SunWise Elite Bundles take closer look at rebalancing

Sun Life Financial and CI Investments have launched SunWise Elite Bundles, a product that rebalances the client’s portfolio based on the fund holdings, rather than at the fund level.

A SunWise Elite Bundle will typically include one or two equity funds and an income fund. The new product would take into consideration any cash or bonds held within the equity funds, adding that amount to the fixed income allocation when rebalancing the portfolio.

Under the new SunWise Elite contract, a portfolio must have a minimum 30% allocation to fixed-income investments.

The Bundles are available for SunWise Elite Combined Guarantee Option (Class B) and Basic Guarantee Option (Class C) units, and with SunWise Elite Plus, the guaranteed minimum withdrawal benefit (GMWB) rider.

There are seven bundles available, including:

• SunWise Elite CI Cambridge Core Bundle • SunWise Elite CI Cambridge Balanced Bundle • SunWise Elite CI Harbour Core Bundle • SunWise Elite CI Harbour Balanced Bundle • SunWise Elite CI Signature Core Bundle • SunWise Elite Dynamic Core Bundle • SunWise Elite Fidelity Disciplined Core Bundle

A Core Bundle combines one or two equity funds with a conservative bond fund. A Balanced Bundle combines one equity fund with a diversified income fund.

Sun Life and CI also added the SunWise Elite CI Signature Corporate Bond Corporate Fund to the SunWise Elite fund lineup.

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Laval wins Jeux du Commerce

A winner has been crowned for the 22nd annual Jeux du Commerce TD Assurance Meloche Monnex, held at Concordia University’s John Molson School of Business over the weekend.

The delegation from Université Laval received top marks with an overall score of 90.7. The theme for this year’s competition was “Responsible management, sustainable actions.”

“I would like to congratulate the delegates from Université Laval, who set themselves apart during this edition of the Jeux du Commerce through their commitment and talent,” said Henry Blumenthal, vice-president and chief underwriter at TD Insurance, and honorary chair of the games. “I would also like to acknowledge each of this year’s category winners and all participants. Thanks to your enthusiasm and team spirit, I see a bright future for management in this country.”

The competition included academic case studies, a stock simulation, a debate and athletic events. Roughly 1,200 students and volunteers took part in the competition, coming from 13 Francophone and Anglophone universities in Quebec, Ontario and New Brunswick.

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Institutional investors upbeat

Citigroup Capital’s latest poll of its institutional clients reveals a surprisingly bullish mood.

Almost 33% of the 130 pension, mutual fund and hedge fund sector clients polled forecasted a 1,200 to 1,250 target range for the S&P 500 by the end of the year. A further 15% believe 1,250 to 1,300 points is likely, and fewer than 5% expect the market to slip to less than 1,050.

Popular sectors include tech, energy, healthcare, industrials and materials, and financials. Respondents expressed bearishness on utilities, consumer discretionary, consumer staples and telecom services.

(01/11/10)