All Liability-driven investment (LDI) articles – Page 8
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OpinionHow to beat volatility in 2019
With an eye purely on the numbers, it might be tough to pinpoint exactly what has led to the worst year for stock markets since the end of the global financial crisis.
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News
UK pension deficit could increase by £219bn in a hard Brexit
On the go: A no-deal Brexit could see the aggregate buyout deficit of UK pension funds rise by as much as £219bn (37 per cent), according to Cardano.
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News
DB health improves but covenant strength ignored
Defined benefit pension schemes are not paying enough attention to the likelihood of their employer going bust when setting investment strategy, according to a new study assessing funding levels in the context of sponsor health.
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OpinionWhat will LDI adoption look like over the next few years?
Cardano’s Paras Shah discusses scheme adoption of liability-driven investment, and how it may evolve over time.
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News
Schemes shift attention from interest rates to inflation hedging
On the go: Inflation hedging has seen a sharp rise with activity up by 22 per cent in the third quarter of 2018, to around £24.2bn. Total interest rate hedging activity was around £29.2bn in the third quarter, a 1 per cent fall according to the BMO Global Asset Management.
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PodcastsPodcast: What does the future hold for LDI?
Podcast: The popularity of liability-driven investment strategies among defined benefit pension funds has increased over the years. In 2017, the total notional value of liabilities hedged by LDI strategies continued to grow, rising to £965bn from £904bn, according to XPS Pensions research. In this episode, Nick Harvey, principal at XPS Pensions, discusses how scheme exposure to LDI has changed over time, and what the future holds for this type of investment strategy.
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NewsThales ups alts for predictable cash flows
Trustees of the Thales defined benefit pension fund have taken steps to move away from listed equities and increased the scheme’s exposure to investments with more predictable cash flows.
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FeaturesBBC matches cash flows after strong 2017 returns
The BBC Pension Scheme has slashed its exposure to equity markets, in an attempt to lock in recent outperformance with liability-driven investment, private credit and alternative matching assets.
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OpinionIndustry must help small schemes keep up with standards push
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.
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OpinionThe evolution of the outcome-oriented DB investment solution
Data Crunch: Broadridge’s Jonathan Libre takes a look at the evolution of defined benefit investment strategies to date, and outlines potential new trends as final salary plans mature.
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NewsFTSE 100 steps up derisking drive as deficits shrink
Defined benefit schemes of FTSE 100 employers continue to derisk investment portfolios at a rapid rate, despite mismatching of assets and liabilities generating attractive returns over the last year.
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News
Small schemes making most of accessible LDI solutions
The total value of liabilities hedged by liability driven investment strategies increased to £965bn over 2017, as smaller schemes continued to take advantage of more accessible and affordable LDI solutions.
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FeaturesElectrocomponents scheme invests in bespoke pooled fund
The UK defined benefit scheme of FTSE 250 distributor Electrocomponents has moved much of its fixed income exposure into a qualifying investor alternative investment fund.
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OpinionRising rates: to hedge or not to hedge?
With interest rates on an upward move, pension schemes that can afford to be tactical should review their hedging strategy without delay, according to Russell Investments’ Jihan Diolosa.
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Opinion
Roundtable: How can schemes prepare for uncertainty in fixed income?
What does the end of an unprecedented era of quantitative easing have in store for interest rates, and how should increasingly mature defined benefit schemes adapt? PGIM’s Edward Farley, Barnett Waddingham’s Sophia Heathcoat, MJ Hudson Allenbridge’s Anthony Fletcher, Independent Trustee Services’ Dinesh Visavadia, Bestrustees’ Graham Wardle and independent trustee Alexandra Martinez discuss.
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OpinionAvoid rear-view mirror driving
From the blog: A lot of schemes use funding level triggers as part of a derisking journey. Once a certain funding level is met then you derisk by disinvesting from growth assets to add to the matching assets. This reduces the level of risk of the investment strategy but also reduces the expected returns.
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Opinion
PPF: We are ready for whatever comes our way
In-house management has helped get the Pension Protection Fund in a good place, says the fund’s Trevor Welsh.
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OpinionData Crunch: Retail and institutional – two very different investment worlds
Institutional and retail investment are still worlds apart, explains Magnus Spence from research company Broadridge.
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Features
Islington weighs up equity protection strategies
The London Borough of Islington Pension Fund is assessing three equity protection strategies as part of its ongoing investment strategy update.
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FeaturesReuters adds MAC fund as trend expected to continue
The Reuters Pension Fund has invested in a second multi-asset credit fund and dropped a loans fund, as the lure of high risk-adjusted returns continues to draw investors to MAC products.