A Statistical and Qualitative Review of Q4 2016 & Outlook for 2017


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LDI-Q4 2016 Review & Outlook

Andrew Catalan, CFA

Andrew Catalan, CFA - Managing Director & Senior Portfolio Manager of the Liability Driven Investing group

Key Q4 Takeaways:

  • ¬†2016 turned out to be a year that defied consensus with different outcomes than telegraphed for Brexit and the U.S. election.
  • After starting out the year in the doldrums with concerns over China, markets rallied globally by year-end with the election reigniting animal spirits.
  • Rates sold off materially post the election but remain at levels seen only a few quarters ago.
  • Higher rates were the primary driver of improved funded status for pension plans, which face further mortality assumption changes.
  • Animal spirits dominate entering 2017 as the political transition in the U.S. is expected be business and market friendly.

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