LDI: Complexities, Challenges, and Opportunities

Abstract

This special issue of The Journal of Investing presents a set of articles that addresses some facets of the complex issues around liability-driven investment (LDI). Given the complexity of LDI, the authors recognize that many issues have been left unaddressed in this special issue. However, the researchers in this special issue have considerable experience in managing fixed-income portfolios and in designing custom solutions for client needs in the LDI arena. The articles address important issues, such as the role of risk factors in LDI solutions, distinguishing between liability-hedging and risk-seeking assets in designing LDI programs, the importance of diversification for LDI, and, importantly, the role of glide paths in dynamic de-risking.

TOPICS: Fixed-income portfolio management, pension funds, retirement