|Bid||251.90 x 0|
|Ask||251.90 x 0|
|Day's Range||246.70 - 253.00|
|52 Week Range||214.90 - 292.30|
|Beta (3Y Monthly)||0.86|
|PE Ratio (TTM)||7.80|
|Forward Dividend & Yield||0.17 (6.55%)|
|1y Target Est||288.79|
British insurer Legal & General will offer annuities to Prudential pension savers in a deal it expects will increase its 2020 annuity sales by 15%, L&G said on Friday. Legal & General is one of the biggest players in annuities in Britain which offer pensioners a fixed income for life. Prudential pulled out of the annuity market in early 2017.
Investors can approximate the average market return by buying an index fund. While individual stocks can be big...
(Bloomberg) -- A once-unthinkable collapse in global bond yields is forcing pension funds to buy bonds that offer negative returns -- putting the financial security of future retirees in jeopardy.U.S. institutions managing trillions of dollars in retirement savings -- including the California Public Employees’ Retirement System -- have been ratcheting down return expectations. Japan’s Government Pension Investment Fund, the world’s largest, has warned that money managers risk losses across asset classes. In Europe, pension funds may be forced to cut benefits in part thanks to the decline in rates.Investors were already taking on more credit risk to make up for dwindling income elsewhere, with some chasing less liquid markets like private debt. Now, negative yields on over a quarter of investment-grade bonds -- with more monetary easing to come -- are increasing the urgency for portfolio managers to find new sources of returns.“The true madness is pension funds being forced to invest in assets which will be guaranteed to lose, such as in the case of long dated inflation-linked gilts at real yields of -3%,” said Mark Dowding, chief investment officer at BlueBay Asset Management, which has pension-fund mandates. “It is financial vandalism and the government and central banks need to wake up to this.”Pension funds invest in a variety of assets, but most including defined-benefit plans use low-risk assets such as government bonds as the benchmark discount rate. While that means they have profited from the fixed-income rally, falling yields have also driven up future liabilities -- in turn threatening their ability to meet oncoming obligations.“The $16 trillion of nominal negative yielding bonds in the world right now -- for the pension industry that’s not a good outcome,” Nigel Wilson, the chief executive offer of Legal & General Group Plc, said in a Bloomberg Television interview. Ben Meng, chief investment officer of Calpers said earlier this year that the expected return over the next 10 years would be 6.1%, down from a previous target of 7%. Scott Minerd, chief investment officer of Guggenheim Partners, warns that the Federal Reserve’s policy easing is contributing to a likely government-bond bubble and that very narrow credit spreads have greater potential to widen.Ten-year yields are negative across higher-rated European government bond markets while Germany’s entire curve fell below zero. Similar rates are also sub-zero in Japan, while they’ve recently hit record lows in Australia and New Zealand. In the U.S., 30-year Treasury rates hit an all-time low of 1.91% this month.‘Dire’ SituationPeter Borgdorff at Dutch fund PFZW blamed “that ever-lower interest rate” for its coverage ratio that stood at 94.8% at the end of July.“The financial situation of PFZW is starting to get dire,” Borgdorff wrote in his blog. “A pension reduction in the year 2021 has been threatening for some time. But if we have a coverage ratio at the end of this year that is lower than around 94%, we should already reduce pensions even next year.”The plunge in yields risks spawning a vicious circle for the industry. The squeeze on returns tends to widen funding gaps, forcing managers or employers to inject more cash into the plans. That’s money which could have otherwise been used to fuel business or consumption so economic growth may take a hit -- boosting calls for even more monetary easing.Shrinking Assets“The overall impact is that lower yields can induce households or companies that act as plan sponsors, to save even more for the future,” said Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase & Co, in a recent note. “In our conversations with clients, the experiments of central banks with negative rates are viewed more as a policy mistake rather than stimulus.”Pension assets dropped 4% in 2018 to $27.6 trillion, according to the Organisation for Economic Co-operation and Development. While gains on stocks have helped plug funding gaps, it’s no secret that income-starved managers have dived into less liquid assets.One way out of the pension quagmire is to allow more retirement funds to invest in “real assets in the real economy,” said Wilson at Legal & General. Cases are legion. One of the Nordic region’s largest pension funds is reducing its stock of government bonds for alternative assets, which could include real estate and private equity. A scheme for the retired clergy in England is shifting allocations to private credit. A fund for U.K. railworkers, meanwhile, is looking to boost exposure to private debt to as much as 40% within a private-investment strategy totaling 4.5 billion pounds ($5.5 billion) across two funds.Chris Iggo, chief investment officer for fixed income at AXA Investment Managers, frets over the fallout from this extended era of ultra-low yields.“In 2008, most people in the markets had no idea about the leveraged web of instruments that were ultimately linked to the housing market in the U.S.,” he wrote in a note, referring to the subprime debt crisis. “We should be worried about lower and lower bond yields...They may cause some, as yet not fully understood, tensions in the financial system with structural implications.”(Adds comments from CEO of Legal & General.)\--With assistance from Liz Capo McCormick, Charlotte Ryan and Tom Keene.To contact the reporter on this story: Anchalee Worrachate in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Samuel Potter at email@example.com, Anil Varma, Sid VermaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Over the past 10 years Legal & General Group Plc (LON:LGEN) has grown its dividend payouts from £0.041 to £0.16. With...
The following are the top stories on the business pages of British newspapers. Legal & General Group Plc said it had bought the company behind My Future Now for an undisclosed sum and would be making its service available to customers and financial advisers, following the UK government's plans for a state-backed service enabling people to see all their pension entitlements on one web page.
Every investor in Legal & General Group Plc (LON:LGEN) should be aware of the most powerful shareholder groups...
The closing auction — a window of just five minutes — is becoming the most heavily traded part of the day, a shift that has driven a wedge between investors, banks, exchanges and regulators.
Today we'll take a closer look at Legal & General Group Plc (LON:LGEN) from a dividend investor's perspective. Owning...
British insurer Legal & General has announced plans to invest up to 4 billion pounds ($5.07 billion) in a 10-year house-building partnership with the University of Oxford. Legal & General said its investment, derived from its shareholder, annuity and managed funds, would go towards developing an initial 3,000 homes for university staff, graduates and the general market. The company has formed a 50:50 partnership with the university on the project and said it could replicate the joint venture with other academic institutions in the future.
Let's talk about the popular Legal & General Group Plc (LON:LGEN). The company's shares saw significant share price...
Legal & General Group Plc (LON:LGEN) saw significant share price movement during recent months on the LSE, rising to...
Britain's biggest asset manager has removed ExxonMobil and four more companies from its 5 billion pounds ($6.3 billion) Future World funds, and said it would vote against their chairs for failing to confront the threats posed by climate change. Legal & General Investment Management (LGIM), the fund arm of insurer Legal & General which has 1 trillion pounds under management, has been among the most vocal asset managers on climate risks, and will also divest from Hormel Foods , Korea Electric Power Corp, Kroger and Metlife.
British insurer Legal & General has teamed up with Amazon to establish what it said is the first blockchain system for corporate pension deals. The insurer said it would use a managed blockchain system launched by Amazon Web Services (AWS) to handle bulk annuities, which involve Legal & General taking over companies' defined benefit or final salary pension schemes. Blockchain suits "the long-term nature of annuities business as it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years," Thomas Olunloyo, CEO of Legal & General Reinsurance said.
Aug.29 -- John Roe, head of multi-asset funds at Legal & General Investment Management, discusses the U.S. economy, the probability of a recession and how a stronger GDP figure could change cuts pricing. He speaks on “Bloomberg Markets: European Open.”