Ten-year Bund yields moved into negative territory on 14 June for the first time ever in Germany, yet the development has come as little surprise to many European pension funds, with some even hoping to profit from it. The continued decline in interest rates in recent months – including those of German Bunds – has actually been of boon to some pension funds, including Austria’s Allianz Pensionskasse.Andreas Csurda, chief executive at the €616m multi-employer pension fund, told IPE: “Interest rates falling even further have increased returns for our existing bond portfolio. The real tragedy is the policy itself.” Csurda pointed out that seven-year Bunds had been negative for some time and said the drop in the 10-year Bund yield from 0.2 to -0.1% was merely a “calculatory cosmetic”. “The real problem over the long term is that the low-interest-rate environment is not helping funded pensions,” he said.He said the European Central Bank’s (ECB) current interest-rate policy had had no visible effect and that it was “currently unclear how it can actually help”.He added that his Pensionskassen had actually been “rather blessed” in the current environment because it had no guarantees to meet.“This is quite different for the provident funds (Vorsorgekassen), which have to guarantee the level of contributions, as well as for life insurance companies, of course” he said.Csurda argued that the ECB’s interest-rate policy was “slowly destroying” much had been achieved to strengthen funded pensions in Europe in recent years.Günther Schiendl, CIO at VBV, Austria’s largest pension fund, said the negative 10-year Bund yields were “to be expected” and would remain at a “similar level” for some time.At Publica, Switzerland’s largest public pension fund, CIO and chief economist Stefan Beiner said interest rates continued to fall worldwide, due largely to global deflationary pressures and “political uncertainties such as the Brexit vote”.Duration management, he said, had become “more important than ever”.Tom Mergaerts, chief executive at Amonis, a €1.8bn Belgian pension fund for the healthcare sector, said yield changes such as the one seen in the 10-year Bund were “not a big deal”, as the scheme had already been “largely immunised”.“But it is an important issue for investing future contributions,” he added. The pension fund has a 12.3% allocation to German government bonds in its liability-driven investment (LDI) portfolio, used for the asset-liability interest rate risk hedge.The LDI portfolio accounts for 60% of total assets under management, with the remainder invested in a growth portfolio.For its growth portfolio, Amonis tries to avoid buying negative-yielding assets, according to Mergaerts, and may consider selling some “over-priced” bonds.In a statement, Deutsche Asset Management CIO Stefan Kreuzkamp said the 10-year Bund rate was “the measure of all things” in the German financial sector.“The meltdown of this benchmark is distorting all asset classes,” he said.The slipping of the Bund yield into negative territory increases the importance of the German government’s decision earlier this year to extend the calculation basis for the discount rate used for pension liabilities, under local accounting standard HGB.It extended the calculation basis to include the previous 10 years of interest-rate levels, rather than just seven, which would have already excluded any pre-crisis levels.
Published on March 19, 2019 at 11:45 am Contact Billy: email@example.com | @Wheyen3 Comments Syracuse (20-13, 10-8 Atlantic Coast) earned a No.8 seed in the NCAA Tournament. The Orange will travel to Salt Lake City to take on No. 9 seed Baylor (19-13, 10-8 Big 12) on Thursday in the West region. The Bears bowed out of the Big 12 tournament in their first game, losing to eventual tournament champion Iowa State.Here’s what to know about the Baylor Bears.All-time series: Syracuse has won both meetings in program history against Baylor.Last time they played: Syracuse played in the Maui Classic in 2013 and met Baylor in the championship game. The Orange rolled out a starting five of Tyler Ennis, Trevor Cooney, DaJuan Coleman, Rakeem Christmas and CJ Fair. The Orange were led by the left-handed Fair’s 24 points, and they pulled out a seven-point victory, 74-67. It was SU’s third win in three days. The Baylor report: The Bears are led by 6-foot-1 senior guard Makai Mason, who previously starred in the NCAA Tournament for Yale. Mason missed some games in the middle of the season but returned for the Big 12 tournament game against ISU. He pours in 14.6 points per game while leading the Bears in assists at 3.2 per contest in the defensively-driven Big 12.AdvertisementThis is placeholder textBaylor is without Tristan Clark, who had averaged 14.6 points per game before suffering a season-ending injury in January. Two other Bears average double figures: 6-foot-7 Mario Kegler and 6-foot-3 Jared Butler. Butler leads Baylor with 55 made 3-pointers, while Kegler adds six rebounds per game to his resume. The tallest player on Baylor is 6-foot-10 freshman Flo Thamba, who averages just 10 minutes a night. The Bears’ most-frequent starting center is 6-foot-8 Freddie Gillespie, a former Division III player now in his first year at Baylor. That lack of height doesn’t keep the Bears from crashing the offensive glass, though — they rank No. 2 in the country in offensive rebound percentage, pulling down 38.2 percent of their misses. How Syracuse beats Baylor: Protect the defensive glass and score in the halfcourt. Baylor and Syracuse have two of the nation’s longest average times per possession, meaning neither looks to frequently run the fast break. That means when the Bears drop back in to their varied 2-3 zone or man-to-man defenses, the Orange need to put points on the board with possessions at a premium. The expected return of Tyus Battle, who Orange head coach Jim Boeheim said should be at 100 percent by Tuesday, should ease some worry on the offensive end of the floor for SU.While Baylor succeeds on the offensive glass despite a relative lack of size, the Orange are the nation’s tallest team, but because of some 2-3 zone philosophies, SU allows opponents to grab a third of available offensive rebounds. SU is one of the 20 worst teams in the country at protecting the defensive glass. Each team will recognize that disparity, and whoever wins the battle of the boards might continue dancing.KenPom odds: Syracuse is given a 52 percent chance to win, by a projected score of 68-67Stat to know: 14.4 — The percentage of offensive rebounds that Mark Vital grabs while on the floor for Baylor, leading the Bears and No. 23 in the country. Vital is only 6-foot-5.Player to watch: Freddie Gillespie, forward, No. 33Gillespie was a walk-on at Baylor after playing two seasons at Division III Carleton College in Minnesota. That came after beginning organized basketball in eighth grade, according to his roster bio, along with two major injuries in high school. But since Clark, the Bears’ second-leading scorer went out for the season with an injury, Gillespie has been more than a feel-good story. Since Feb. 2, he’s averaged nearly 23 minutes per game. The 6-foot-8, 240-pound forward will be crucial to helping Baylor overcome a size disadvantage against Syracuse. Facebook Twitter Google+