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Reaching for yield or resiliency? Explaining the shift in Canadian pension plan portfolios

Sébastien Betermier, Nicholas Byrne, Jean-Sebastien Fontaine (), Hayden Ford, Jason Ho and Chelsea Mitchell

No 2021-20, Staff Analytical Notes from Bank of Canada

Abstract: “Reach for yield”—This is the commonly heard explanation for why pension plans shift their portfolios toward alternative assets. But we show that the new portfolios also hold more bonds, offer lower average returns and produce smaller and less volatile solvency deficits. These shifts are part of a broader strategy to reduce solvency risk.

Keywords: Financial institutions; Financial markets; Financial system regulation and policies (search for similar items in EconPapers)
JEL-codes: G11 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-age, nep-isf and nep-rmg
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