Cash flow-driven investing is flavour of the month with managers and consultants, but River and Mercantile's Mark Davies says a credit-reliant implementation of this strategy does not mitigate as much risk as trustees might assume.

Small schemes will always lack the time and resource to match the sophistication of their larger peers unless consultants and providers help them, writes River and Mercantile Derivatives' Mark Davies.

From the blog: Equity protection is back in vogue, with falls in markets at the start of the year putting downside protection strategies front of mind.

It is often more expensive for schemes to buy downside protection after markets have tumbled, as demand for such solutions jumps.

In fact, many schemes are missing a trick shelling out for this expensive downside protection, because costs do not have to be prohibitive as long as schemes buy the right kind of protection for them.

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From the blog: Growing up in Shropshire and working in London means the M6 has been a feature of my life for years.

On balance, I have found that I would rather take the M6 toll and be wrong, losing 10 minutes, than take the M6 and be wrong and lose two hours.

This experience is not dissimilar from the decision that many trustees feel they have to make when deciding to implement liability-driven investment.

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From the blog: How many readers of this would travel to New York by boat?

I read with interest Rob Gardner’s Talking Head piece on the need to think differently and work together to solve the problems we face. 

One example of how thinking has changed dramatically over the past 50 years is transatlantic travel. Clearly this switch didn’t happen overnight.

We had to think about things differently, get comfortable with 'new' ideas and make those ideas more accessible.

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