(New York)

If there were ever a product built for steady retirement income, it is fixed annuities. With the big decline in fixed pensions, fixed annuities have become a must-have option for many retirees who need guaranteed income. They are the simplest annuity—principal and income are guaranteed, but rates are fixed. In other words, the insurance company is bearing the risk, so they get the upside, but the customer gets peace of mind. Therefore, the basic utility of annuities is to support everyday income in retirement. There are other uses too, especially in the current market environment. For example, “Right now, some fixed annuities make an attractive alternative to both bonds and CDs in a portfolio, due to the principal guarantees and interest rates offered”, says one financial advisor at Stack Financial Services.

FINSUM: The most important thing to remember is that annuities have utility in most portfolios, but they should only ever be just a portion of a portfolio. They suffer from illiquidity and are very susceptible to inflation, but they also have guarantees that no other asset class can offer.

(New York)

One of the largest asset managers in the world made a potentially very worrying claim today: that ESG today is a lot like the tech bubble was in year 2000. The sovereign wealth fund of Norway’s CEO, Nicolai Tangen, says that much like dotcom stocks, ESG asset are trading at very frothy valuations. What is interesting about his claim, though, is that he is not focused on the potential “bubble”, but rather on what those valuations mean. “What is interesting is, if you compare the situation now with, for example, the situation before the year 2000, then the stock market was right that technology companies were going to do well in the future … But the valuation went a little high, so it came down again, but the technological development continued, said Tangen. He continued, “We may see something of the same sort now, that what is happening in the green shift is extremely important and real”.

FINSUM: So Tangen is saying there is a big bubble in ESG, but in the way only an ultra-long-term investor like a sovereign wealth fund can, he is focused on how the market is “right” about its long-term potential.

(Washington)

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(New York)

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(New York)

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