Vincent Deluard, director of global macro strategy at StoneX Group Inc.
U.S. pension funds assume that they will earn 7.25% on their portfolios by mixing assets which yield less than 3% on average. Even if pension funds were to invest solely in the highest-yielding asset (junk bonds), they would still miss their target by about 200 basis points, while taking an amount of risk which would violate their fiduciary duties.