User talk:Blbarnitz/Pension fund performance

Is the "Accounts/plans" column in the "US pension plan performance studies" table used to describe the study methodology? I was going to change the column title to "Study Methodology" but then I realized that I didn't understand what these terms meant in the given context.

--LadyGeek 20:00, 1 January 2014 (CST)
 * delegated portfolios - ?
 * plan - ?
 * plan (CEM database) - ? Same as plan, but used the CEM database


 * The study of defined pension fund performance has been limited due to the paucity of available information.


 * This is my limited understanding of the issue. A defined pension fund will usually manage a portion of plan assets internally and also delegate assets to outside managers. These are delegated portfolios, and a number of studies examine the portfolio performance of these managers.


 * Example: Amalgamated Widgets defined benefit pension plan manages 58% of the plan's assets and internally and delegates 42% of planned assets to six outside managers.


 * Since the outside managers' portfolios are more easily available for study, these are studied by investigators. Note that these studies will not tell us how the Almagated Widgets Defined Benefit plan has performed.


 * Other studies measure the performance of the actual defined pension plan, subject to available performance data.


 * Another group of studies measures the performance of actual defined benefit plans using the CEM database.


 * I do not have a familiarity with CEM; they have a connection with a Canadian Rotman School of Management at Toronto University, and I have read that Ken French used the CEM database cost data in one of his recent papers on active management --Blbarnitz 22:04, 1 January 2014 (CST)

I found this SSRN paper: Organizational Structure and Fund Performance: Pension Funds vs. Mutual Funds. The difference between a pension and mutual fund is a fundamental concept which I didn't realize until after I read the introduction (obvious in hindsight):

The organizational structure of the pension fund industry is distinct from the mutual fund industry. In the mutual fund industry, retail investors directly allocate their own personal wealth to the mutual fund of their choice. In the pension fund industry, the employees of a corporation typically delegate investment choices to a corporate treasurer who then selects a pension fund. This additional layer of delegation offers several benefits. Pooling the assets of many small investors allows treasurers greater negotiating power and monitoring capacity... corporate treasurers are more financially sophisticated than the average retail investor. Their greater financial sophistication may allow them to better identify skilled fund managers. ...However, delegation may also result in agency costs. Rational investors’ desire high risk adjusted returns, but treasurers may have a different objective.

I think this paper also connects your developmental page to US mutual fund performance studies but I don't have any experience to go further. --LadyGeek 19:52, 2 January 2014 (CST)