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U.S. Pension Funds Hold Clue to Relief for Slumping Treasuries

  • Pensions may want to lock in high funding levels: Man Group
  • Funds may actively start buying U.S. Treasuries: Mizuho Bank

U.S. pension funds may be primed to take advantage of higher yields in global bonds and could put a floor on the market’s slump. 

Pension funding versus liabilities was close to 100% at the end of 2021, for the first time since the financial crisis, according to investment advisory firm Milliman, based on data from 100 U.S. public companies sponsoring the largest defined benefit pension plans. Such funds could be “keen to lock in” that status and turn to the government bond market to de-risk, according to portfolio managers at Man Group.