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Senior couple on park bench.
Senior couple on park bench.
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Pension funds desert equities in their hour of need

Bill Gross, the bond market guru, reckons the cult of equity is dead; Nassim Nicholas Taleb, the hedge fund guru, advises smart kids to shun careers in investment management and the jobs in stock trading continue to fall like autumn leaves on Wall Street and in the City of London.

If you needed more evidence that it’s all over for brokers, some statistics emerged last week from the U.K. Pensions Regulator that confirmed that the flight from risk is real. The share of equity across Britain’s 6,000 defined benefit pension schemes has for the first time fallen below that of bonds. Some might think it a lagging indicator, especially among those who see the present stock market malaise as a buying opportunity. But this watershed moment may be time to consider why funds continue to shun apparently cheap equity shares. If pension fund managers are avoiding equities for any reason other than investment fashion, we shouldn’t expect any pole vault to high equity returns.