Pension fund works by investing the of your pension pot in various investment products. This includes funds made up of stocks, bonds and cash. These investment products are expected to grow over time, potentially increasing more than inflation. This makes sure that by the time you retire, you have enough money in your pension pot to live off it.What is the main function of pension funds?
Pension funds perform important economic functions, such as mobilizing and managing savings, providing income stability, making labor markets more efficient and providing exposure to systemic risk in the financial markets.Where do pension funds typically invest?
This Is Where Most Pension Funds Invest Fixed Income Investments. U.S. ... Stocks. Equity investments in U.S. ... Private Equity. Institutional investors, such as pension funds, and those classified as accredited investors invest in private equity-a long-term, alternative investment category suited for sophisticated investors. Real Estate. ... Infrastructure. ... Inflation Protection. ... The Bottom Line. ...