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LDI's role in pension plan strategy: Risk and return considerations

May 2011
Liability-driven investing (LDI) has grown in popularity and is now widely recognized, from both the plan's viewpoint and that of the sponsoring corporation, as a way to reduce risk by aligning investment programs more closely with the liabilities they must eventually meet. In this paper, we look at the role played by LDI from a range of perspectives, both risk-focused and return-focused.
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Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
Date of first use: May 2011
USI-9856
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