Richard Lunt

Investment Actuary at Hymans Robertson. DB/DC strategy specialist. Average cyclist. Views here are my own.

[Pension Protection Fund @PPF]

We welcome the government’s commitment to establishing a public sector consolidator by 2026 and their recognition that we'd be well placed to take on this additional and separate role.

[Pension Protection Fund @PPF]

We believe a public sector consolidator can help deliver the government’s objectives and complement existing commercial solutions. We look forward to working closely with @DWPgovuk and industry as the detailed design of, and eligibility for, the new vehicle is developed.

[Richard Lunt @PensionsLunt]

@DuncanLamont2 Too right - that would be great! 😎

[Richard Lunt @PensionsLunt]

First day at my new job at Hymans Robertson. What a great bunch! Really looking forward to getting stuck into the work here.

[Richard Lunt @PensionsLunt]

Hmmmm… anyone who has seen the impact of simply taking coal miners out of portfolios would know their carbon generative impact. No financial services heavy developed country can open a new coal mine while claiming to have ESG credibility.

[Richard Lunt @PensionsLunt]

A few tweaks to my LDI material for today's @YorkASoc presentation! 🎄🎅

[Richard Lunt @PensionsLunt]

"We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not [already started the parliamentary process]."

Brutal. He's reversed almost everything and cutting spending... and it's working so far (10 yr gilt - 40bps). Precarious though.

[Richard Lunt @PensionsLunt]

🤨

[Richard Lunt @PensionsLunt]

#buygilts

[Richard Lunt @PensionsLunt]

@DuncanLamont2 The sovereign CDS charts caused me to raise an eyebrow as well 😱

[Richard Lunt @PensionsLunt]

Dare I suggest that… if your model keeps throwing out “one-in-200 year events” a few times a year then…it isn’t a very good model…? 😬

[Richard Lunt @PensionsLunt]

The NASDAQ is down 32% for the year. Add this one to the 'supposed to happen once every twenty years' list.

[Richard Lunt @PensionsLunt]

We’re doing more and more advice for charity reserves. If someone you know would like a quote for strategy / evaluation of current approach / selection work, drop me a line. We use variability modelling tools as well as our fund manager research function (ESG, ethical available).

[Richard Lunt @PensionsLunt]

RPI at 8.3% pa coupled with equity falls and credit spreads widening #whack

[Richard Lunt @PensionsLunt]

If the Bank raises rates in uncertain times like these... the Bank will raise rates a lot further. It's a bit Covid-shock like... massive winners and losers based on pure luck (e.g. I worry re low paid, low post-Covid pay increase, high mortgage, gas/electric users who drive).

[Richard Lunt @PensionsLunt]

2/2 Topics I expect trustees to wish to consider… a) Investment grounds (should we hold in case recovers - extra return for members), b) Ethical/philosophical grounds (would our membership want us to support Russian oil/gas/bank entities?). Note I expect trackers to drop Russia.

[Richard Lunt @PensionsLunt]

1/2 The Russian stock market is still closed but ETFs have lost 97%+ of their value. UK schemes have moderate Russian exposure generally, incl soverign debt (Russia less than 5% of FTSE Emerging and schemes are generally underweight), less than 0.3% of all scheme assets I'd say.

[Richard Lunt @PensionsLunt]

Watch out for sterling falling as investors seek the savehaven of the dollar. Overseas imports then go up and add further inflationary pressure (current high inflation is driven by oil/gas both of which now much higher). Public view on government economic skills may change here

[Richard Lunt @PensionsLunt]

Implied volatilty looks cheap to me (long run equity vol is 16% to 18%.....only doubling to 36% or so due to a major war seems to undercook the potential impact on oil, gas, banks for a start). We will look at giving up upside for protection.

[Richard Lunt @PensionsLunt]

Your periodic reminder that listed equity is supposed to do 6% or 7% *a year* and is down most of that in some markets in part of a morning. And wait until the US opens. Beware overly simplifying the characteristics and ten year risks associated with this class.