An overview of news, market movements and insights focused on US pension schemes.
2025 – Ten themes that shaped the year
Credit ratings apply to all debt of the same seniority, regardless of maturity, despite greater default risk over longer time horizons.
Credit spreads in high yield markets tend to be relatively flat, offering little benefit for duration risk unless you have a strong market outlook. Thus, investors in short-dated high yield are disproportionately compensated for the credit risk they assume.
The era of surplus and decumulation
In our US Pension Monitor we highlight that corporate defined benefit (DB) pension plans have entered a new era, with average funding ratios surpassing 100%. As plans move deeper into decumulation, investment strategies are evolving – with a rotation from equities to fixed income, including private credit. However, rising payout ratios highlight liquidity challenges, making cashflow-driven investment solutions and surplus management strategies critical.
Tapping into AI funding
The surge in financing for AI infrastructure presents a new opportunity in credit markets. Issuance from hyperscalers and other tech leaders offers access to highly rated debt from issuers that rarely tap the market – often at a yield premium to similarly rated corporate bonds.
Higher issuance ahead
Uncertainty remains high
Rising uncertainty across policy, trade, and geopolitics is increasing risks for investors and policymakers. Forecasting is challenged by policy uncertainty, while there is a risk that the US economy tips into recession with negative consequences for risk assets.
France is a key risk
France’s fragmented politics and fiscal uncertainty pose risks for markets, with the 2027 election adding unpredictability and potential underperformance versus eurozone peers.
Below, we feature some of our latest research which may have an impact on pension fund investment strategies.
