Integrated Actuarial and Investment Solutions
River and Mercantile Solutions is a leading institutional investment and actuarial advisor and OCIO provider. We are dedicated to providing our clients with the understanding and tools to successfully meet the investment goals of their institution. River and Mercantile Solutions is a division of River and Mercantile Group PLC, which is publicly traded on the London Stock Exchange (Ticker: RIV).
Recent themes in pension economics continued to play out in October. Equity markets have remained quite volatile, with the VIX (the so-called “fear index”) reaching levels not seen prior to 2020 since the 2011 sovereign debt crisis.
The pension risk transfer market has been negatively impacted by COVID-19. Total pension buyout sales totaled $2.3 billion in the second quarter of 2020, a decrease of 46% compared to the second quarter of last year and the lowest quarterly total since Q1 2018.
Derivatives are a tool, nothing more, nothing less. Just like any tool, if used inappropriately, they can cause more harm than good. Derivatives, such as options on equity indices or futures on interest rates, properly used can be very useful tools for investors. They are used to manage risk and to provide greater certainty around the path of future investment returns.