Despite Market Turbulence, Buffett Remains Bullish

The Oracle of Omaha and chief investment officer of Berkshire Hathaway is optimistic about economic recovery despite recent market volatility.

(August 11, 2011) — The world’s most powerful asset owner is bullish on stocks.

Warren Buffett — the world-renowned investor and CIO of Berkshire Hathway, also known as the Oracle of Omaha — continues to be optimistic, despite market turbulence. As investors panic following Standard & Poor’s credit downgrade, Buffett has aimed to quell fears. Speaking with Bloomberg and CNBC, Buffett expressed his confidence in the US market, reiterating his belief that the ratings agency made a mistake in lowering the nation’s credit rating.

“The lower things go, the more I buy,” Buffett toldFortune Magazine. “We are in the business of buying.” Referring to S&P’s decision as an unjustified downgrade of the US credit rating, he noted that he’s been purchasing equities and seeking to acquire big businesses.

“Up until right now, all of our businesses have been coming back — even Europe isn’t doing that badly — except for businesses relating to home construction which is on its rear end,” Buffett said.

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In contrast, Bill Gross told Bloomberg earlier this week that S&P’s decision was a smart one.

“I think S&P has demonstrated some spine; they finally got it right,” Gross, manager of the PIMCO Total Return Fund, asserted during an interview on Bloomberg Television earlier this week, noting that the US has “enormous problems” in terms of its debt pile.



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

Survey: Schemes Are Overcharged for Services

An actuarial fee survey has found that schemes in the UK are being overcharged for core services.

(August 11, 2011) — Despite increasingly competitive pricing, a new survey has found that schemes of all sizes could be paying more than two and a half times more than their peers in actuarial fees.

The research examined the fees levied at small, medium-sized, and large schemes for routine pension fund tasks by more than a dozen actuarial firms.

More specifically, the research found that actuaries are increasingly competitive when accessing fee structures for smaller schemes in the UK, according to a pension consultancy’s survey of fees charged for core services. “Interestingly, it seems this year the majority of firms’ fees are above the average annual actuarial fee, compared to last year when the majority were below. This indicates the improved competitiveness shown in the smaller schemes is not so evident here,” the survey said.

The findings showed that some small schemes are paying 36% more than the average quote for the same services and some medium schemes are paying 30% above average. Meanwhile, the least competitive pricing was for large schemes, with some providers asking for 57% above the average quote.

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“It is disappointing the ranges between highest and lowest fees at all scheme sizes are still broad, but what was pleasing was real evidence that competitiveness is increasing year on year,” KGC senior partner Kim Gubler told Professional Pensions, noting that fees were moving in the right direction. “However, this wasn’t evident across all services or all scheme sizes, so it proves that trustees really need to look closely at what they are being charged for all their core services.”



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

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