Riskier strategy of pension funds

US pension funds have consistently outperformed US mutual funds in securities-lending returns during the three years from mid-June 2006 through mid-June 2009. There is a healthy ongoing debate as to the basis for the difference in returns. Some believe it reflects the different regulatory environments of each sector; others say it is influenced by the sophistication of those overseeing the programs. Irrespective of the cause, the key point is that the difference was marked and observable. More ongoing scrutiny and oversight of securities-lending returns and risk is needed.