Market Trends of US Pension Funds Industry
Asset Allocations in Pension Funds is Driving the Market
Asset allocation has been at the center of investment decision-making for many funds. A pension fund is an investment made to provide for retirement income. These funds are normally invested in equity bonds and other instruments with lower risk for a long-term period. Various distributions of the funds are done to minimize the risk and maximize the returns over the long term. The average Fortune 1000 pension plan held an average of over USD 4.9 billion in assets at the year-end of 2021. The average allocation to public equity was more than 30%, while the average debt allocation was more than 50%. Asset allocation involves dividing your investments among different assets, such as stocks, bonds, and cash. This allocation in the pension fund market in the US shows that players have diversified their portfolios. This will drive the market, as it will have a positive impact on the returns on investment.
Increasing Retirement Assets Is Driving the Market
At the end of December 2022, retirement assets made up 30% of all financial assets owned by households in the United States. Total US retirement assets were USD 33.6 trillion as of December 31, 2022, 3.9 percent up from September. Individual retirement accounts (IRAs) hold the most retirement assets, at 34% of the total. Since 2012, they doubled, jumping from USD 5.8 trillion to USD 11.7 trillion in 2022. The overall US retirement assets were more than USD 33 trillion as of 2022. Pension funds are a way of making your financial investments future-proof, as after retirement a person should have funds to keep their standard of living constant. Various economies across the globe are experiencing growth in retirement funds and assets.
