Brandes: Illusions of Precision, Completeness, and Control
Low yields and fairly full equity valuations put pension funds in an awkward position. Too much reliance on Treasury bonds or other very low risk securities makes it hard to account for future liabilities, but investing in riskier assets that put principal in jeopardy is usually constrained (and rightly so). But for Public Employment Retirement System of Idaho (PERSI) CIO Bob Maynard, the problem isn’t that fund managers are ignoring risk, it’s that they overestimate their ability to control it.
“The Financial Crisis . . .
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