Pension funds: Quarterly ratings don't make sense

A growing media focus on pension funds' quarterly results is at best pointless, and at worst, can prompt managers to step up risk taking in order to beat peers next time around. AMWatch asks players across the Nordic pensions industry about the pros and cons of transparency.

Announcing winners and losers based on quarterly results is in the best case a waste of time, pension industry says. | Photo: Colourbox

As transparency becomes increasingly important throughout public life, so pension funds are open about their activities including the financial returns they make on their clients’ money. More and more, pension funds are asked for media comment on quarterly results.

While it may make sense for an individual to keep updated on what market event may mean for a given investment portfolio, it does not make sense to compare pension funds’ overall results on a quarterly basis, industry players say.

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