Did we beat the Index over 10 years?

What does Just Analytics do?

Our services will improve your Pension Plan’s performance in two areas - we will lower your portfolio risk and improve your portfolio's rate of return by at least 2% per annum – net of fees. 

We can help you achieve a 10% + 'combined risk and return' improvement in your pension plan / endowment fund's performance. 

How?

My company uses ‘the Science of Analytics’ to identify those Investment Funds that have a very high likelihood (90%+) of consistently outperforming the market – we refer to them as Tier One funds.

It will also identify those Investment Funds that have a high likelihood of under performing the Index so you can avoid those funds. A recent AON research paper concluded that 80% of Investment Funds will underperform the Index, gross of fees, over a 5 - year period.

In a nut shell, we help you replace underperforming funds with outperforming funds. 

Does my Investment Committee have this analytics information? 

I am very confident that your Investment Committee does not have this information. 

Why not?

The simple answer is that the Investment Funds choose not to share this data as more than 90% of them get a failing grade.

How do we make money with this knowledge?

There is a recent Mercer research paper that shows top performing Investment Funds out perform the Index by an average of 70 to 150 basis points per annum. 

So, by replacing Tier 2 or 3 Funds with Tier 1 Investment Funds, we can improve the Pension Funds return by 2% per annum (think $2 million per annum for a Pension Fund with $100 million of Assets Under Management).

What does it take to be a Tier 1 Investment Fund?

A Tier 1 fund meets all of the following criteria:

· A ‘likelihood to outperform’ of at least 90% over a 3-year period,

· A ‘likelihood to outperform’ of at least 85% over a 5-year period,

· An average excess return of at least 2% (200 basis points) per annum,

· A positive Value at Risk rating – see Tier One tab for more details, 

· An Underperformance Ratio of 50% or less – see Tier One tab for more details, and

· An end ‘Value of $100 net of fees’ that is at least 10% higher than the Index for a 5-year period.

Have you used these analytics before?

Early in my career, I had the opportunity to be a trustee for several multi employer, jointly trusteed Defined Benefit union pension plans with Assets Under Management (AUM) in excess of $1 billion USD. We utilized analytics to identify the Investment Funds that were most likely to outperform the market, and thus we were able to significantly improve the funding ratio(s) of those (four) Pension Plans.

Several years later, I had the opportunity to chair the Investment Committee for my company’s Defined Benefit Pension Plan – about $400 million in AUM. 

We conducted the first review of the Investment Funds in 8 years! Two of the 3 Funds were underperforming, the analytics showed their likelihood of these Funds continuing to under perform the market was more than 50%. We terminated the relationship with those Investment Funds, and started a search for new Investment Funds.

Within 3 years, we improved the funding ratio from 74% to 81%. That made our CFO very happy - no more letters of credit or supplemental annual contributions! If my memory is correct, that was ‘hard’ savings of roughly $4 million per annum (equivalent to about 4% of Revenue).

I did this a third time for a DB plan that we inherited through an acquisition; again we were able to generate an average of at least an additional 2% of return (net of fees) each calendar year. 

I decided to start this business as I truly believe most Pension Funds can generate better returns, and have less portfolio risk, by using analytics as part of their decision - making process. 

If you have not already done so, please have a look at the ‘Sample Reports’ tab. You will see the value of our analytics and how your Pension Fund can attain that extra 2% of return per annum.

Thank you for your time and attention. 

Regards Greg