Active LDIThis liability-driven investment approach relies on a risk-managed process where risks present in liabilities are addressed in a manner where they are either:
- Hedged out (those “unrewarded” risks that do not offer sustainable risk premia over the long term), or
- Managed through fundamental research and analysis (“rewarded” risks that offer sustainable risk premia over the long term).
We regard interest rate risk and inflation risk as unrewarded risks and believe that interest rate and inflation views cannot be a sustainable source of alpha over the long term. Therefore, it is our philosophy to hedge out these risks. This is achieved via a quantitative risk-managed approach to hedging, such that changes in assets match changes in liabilities in the presence of yield curve changes. In extreme market scenarios, this provides a defensive return profile relative to our clients’ liabilities.
Targeting retirement funds, life insurers, corporates and government entities, this offering is tailored to the client or scheme’s specific requirements and evolves as these requirements change over time.
Benchmark: An investor's unique liability benchmark
Objective: The portfolio aims to outperform the benchmark, in line with the investor's risk appetite.