Pension funds are designed to be dull. Their singular goal is earning enough money to make payouts to retirees. But as markets in the UK went haywire last week, pension fund managers found themselves at the center of a crisis. The Bank of England stepped into the market the next day with a pledge to buy up to $73 billion in bonds if needed. The scale of the tumult put enormous pressure on many pension funds by upending an investing strategy that involves the use of derivatives to hedge their bets. Pension funds now racing to raise money to refill their coffers, but there are questions about whether they can find their footing before the central bank’s emergency bond-buying is due to end on Oct. 14. For a wider range of investors, the near-miss . . .
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