Bridging Financial Planning and Factor Investing with Northern Trust's Peter Mladina
Excess Returns
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Prioritization of Different Purposes
A pension plan will essentially, based on longevity risks, risk future participation rates, et cetera, they'll just sort of accept as is a liability stream and it's a legal liability. That differs from a goal profile for a private investor where it's far more heterogeneous and it's not a legal liability necessarily like it is for a pension plan. It's heterogeneous, the goals are discretionary, they can change, and there can be different risk preferences around funding those goals so different priority levels. And you're going to effectively walk through the process of how much of each of these goals do you want to hedge out effectively, right?
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