Why Now May Be the Time to Increase LDI Exposure
Why Now May Be the Time to Increase LDI Exposure
Given attractive yields along with high funded ratios and moderate fixed income allocations by pension plans, now appears to be an opportune time for plans to consider increasing their LDI exposure. Darren Hewitson, CFA , Senior Portfolio Manager, discusses opportunities in long duration for pension and LDI investors.
Key Takeaways
- The recent rise in long-term yields has been driven by increased Treasury issuance and declining demand from major investor groups like central banks, commercial banks, and foreign investors.
- While credit spreads have been reasonably well-behaved and valuations are full, our team continues finding relative value opportunities within major sectors.
- SBH can help design customized LDI strategies to capitalize on today’s higher yields based on each client’s unique liabilities and circumstances.
Additional Resources:
Liability-Driven Investing Strategy
Taxable Fixed Income Strategies
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