Managing your pension deficit is more challenging today than in years gone by. As rates have fallen, the dollar value of liabilities has gone up tremendously – while asset values are highly volatile and are also being spent down at an increasing rate.
Institutional investors can enhance their ability to capitalize on the yield and diversification benefits of alternatives universe. This approach allows investors to stitch together multi-asset portfolios in a more efficient, coherent way. Executing this, however is no simple task. If done incorrectly, investors risk negating some of the diversification benefits that make alternatives such valuable contributors to stronger, more resilient portfolios.
As interest rates continue to tumble this year, chief investment officers are left grappling with a familiar problem: finding yield in fixed income without taking on excessive risk.
Many corporate DB plans are looking for ways to maximize the duration of their liability-hedging allocations while using as little capital as possible.