Defined Benefits

Starting in 2024, IBM will replace its 401(k) plan matching contributions with a new benefit earned within its overfunded DB plan, which has been frozen since 2008. This move essentially un-freezes the tech giant's DB plan.

At a recent educational event organized by Franklin Templeton, Franklin Templeton Institute’s Senior Alternative Investment Strategist Tony Davidow hosted a day of panels that focused on alternative investments.

In smart beta, we find that factor returns—net of changes in valuation levels—are much lower than recent performance suggests. In fact, many of the most popular new factors (some 458 at last count) have succeeded solely because they have become more expensive.

Recently, I was asked by a client what my return expectations are for the next three years.

The ancient Greeks had a word κάθαρσις, which in English we now spell as “catharsis,” although it’s pronounced basically the same. It originally referred to purifying religious ceremonies, medical treatments, and so on.

The calendar third quarter of 2023 was a messy one for financial markets at large, and we were not immune to its lack of charms. Nonetheless, it’s been a pretty good year for our small-cap strategy.

Investors are accustomed to getting a snapshot of the market by looking at the latest index statistics. But today, average spreads and yields for investment-grade corporate bonds are deceptive. A look under the hood reveals that intermediate-maturity corporates are a much more compelling opportunity than long-maturity ones.

Some investors are considering making tactical tilts to their fixed income portfolios to take advantage of the current high-yield environment.

Japanese profits have benefited from the prolonged deleveraging of Japan Inc. The reduction in debt coupled with exceptionally low interest rates has allowed cash flow to impact the bottom line.

The U.S. Treasury yield curve is currently inverted, with yields on short-term bonds higher than yields on longer-term bonds. Some expect this to unwind with short-term bond yields falling faster than longer-term yields. Amid these expectations, those investors are wondering if they should consider reallocating to shorter-term bonds.

Thomas Jefferson University (TJU) developed a strategic resource allocation framework to rationalize and simplify the complex legacy portfolio structures it had inherited through mergers and acquisitions.

Public credit markets offer high quality investments with attractive yields and downside resilience, while we see growing longer-term opportunities in private markets.

The strike comes at an inflection point for automotive production.

Today, in a shock decision, the Bank of England (BoE) left its policy rate at 5.25% by the tightest possible majority vote of 5-4. All but one of 65 economists polled by Reuters had predicted that the BoE would raise the rate to 5.5%.

The Franklin Templeton Fixed Income team believe that issuers that think critically about the environment in which they operate could outperform throughout the full market cycle compared with those who are slower to adapt.

In his latest memo, Howard Marks discusses the essential choice in both investing and sports. Should you go for more winners or try to eliminate losers? That is, should you emphasize aggressiveness or defensiveness? This is a key decision that every investor has to make thoughtfully, and the answer can be different for each person.

Higher yields on cash have allowed some de-risking.

On the interest rate front, the Federal funds rate is now close to systematic benchmarks that have historically been consistent with prevailing core inflation, nominal GDP growth, and unemployment.

For some organizations, a partial outsourcing of their investment program is preferable to total outsourcing. Despite this, some OCIO providers will still try very hard to sell companies on a full OCIO solution.

You’re nearly there! You’re nearing the age when you can finally stop working and enjoy some well-earned rest. But there are a few more steps you should take before officially retiring, which will ensure greater financial stability and peace of mind in your later years.

Fitch’s recent downgrade of the U.S. debt rating alarmed investors as the deficit and debt steadily increased. The downgrade sent 10-year Treasury bond yields above 4%, causing concern about America’s deteriorating financial condition.

Young workers are struggling to find jobs, despite labor shortages.

We maintain a neutral-duration posture overall. We prefer an up-in-quality bias and have become increasingly selective in non-investment grades.

I thought I’d lead with some really impressive statistics. I just finished reading our latest ADV Part 2 (the SEC disclosure document provided annually to clients) describing the firm.

Fitch Ratings unexpectedly downgraded the U.S. credit rating from AAA to AA+, only the second downgrade in U.S. history, citing debt limit standoffs and rising entitlement costs.

A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.

UK gilts rally after headline and core inflation numbers surprise to the downside.

ESG scoring and mandates remain a subject we have contested since it sprang to life in 2020. The push of “woke activism” on, and by companies, to meet nebulous or artificial standards has led to various bad outcomes.

Transitioning to a green net-zero economy requires climate solutions that enable the economy to decarbonise, such as renewable energy, electric vehicles, and recycling technologies.

Small business owners without workplace retirement plans now may take advantage of expanded tax credits if they establish one, according to John Kutz, National Retirement Plan Strategist at Franklin Templeton. He outlines recent regulatory and legal developments.

In 2022, the funded status of $20 billion club members reached its highest level since 2007 due to steep rises in discount rates.

Optimism is the madness of insisting that all is well when we are miserable.

India is rapidly transforming into a formidable global superpower and an increasingly attractive destination for investor capital. Amid rising geopolitical tensions and the impact of disruptive technologies, India's story is a beacon of opportunity in a challenging landscape.

Sam Weitzman of Western Asset Management highlights the overlooked potential of municipal bonds as a high-quality asset class. With fixed income yields reaching near-decade highs and higher tax rates impacting taxable fixed income investing, municipal bonds are offering above-average after-tax returns and downside protection, making them attractive for income seekers.

Imagine a new digital environment where our data is portable and democratized, challenging the current monopolies. Web3 promises to be such an environment, using blockchain technology.

Although once considered a niche strategy, secondaries have matured and now represent a vital cog in the private equity ecosystem, according to Franklin Templeton Institute’s Tony Davidow.