When designing your overarching investment strategy to and through retirement, how important are the following factors?
Conviction score, neutral =3
1
5
Expected member outcome over long term
4.9
Only two things matter when it comes to designing an investment strategy: expected 10-year returns and the expected long-term member outcome. There is clearly a degree of overlap between them, but there is also a pattern emerging of a commitment to the long term. Of moderate importance (+0.7) is a drawdown in account balance. We assume that this thinking, together with sequence risk, are part of best practice in DC now.
2.6
Expected member outcome over short term
4.9
Expected performance over next 10 years
Expected performance over next year
2.4
3.7
Drawdown in member account balance
Member’s external retirement support (state pension, other savings)
3.5
Member’s evolving mix of human capital, financial capital, risk-bearing capacity
3.5
3.2
Volatility of member account balance
2.7
Peer group pressure
n=17
12
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