Liability-driven investing implementation
It's a new world. Funding status has a significant impact on your organization's financials and risk.
We know what's at stake. Real people are depending on the future payouts of their pensions in order to enjoy their retirement years. As a fiduciary, it's your responsibility to manage your organization's pension fund in the context of the promises made to your employees and pensioners. Matching assets to liabilities is an efficient means to de-risk a pension.
We seek to understand
We'll work alongside your team to develop a tailored liability-driven investment (LDI) strategy that fits your organization. We start by using innovative tools designed to fully and deeply understand your particular situation.
- What's the impact of your pension on your organization?
- How much is the liability growing?
- What is the expected impact of various volatility factors?
Once your strategy is defined, we'll dynamically implement it for you with complete transparency. Our goal is to get your plan back to full funding and then establish a roadmap designed to keep it there.
Putting it all together
Our integrated process is what sets us apart. We draw from decades of experience working with some of the world's leading pension plans and adapt these solutions to deliver real, lasting value to you.
Our series of target duration LDI funds provide flexibility¹
We recently launched six target duration LDI commingled funds benchmarked to the new Barclays-Russell LDI Index Series. These funds can be combined to give plan sponsors the ability to customize the exposure to more closely match their duration characteristics.
A daily, real-time, dynamic process
Good strategy without the right implementation won't get you very far. Effective implementation can contribute to returns and reduce plan risk through overlays and titls enacted at the right time.
We are relentless about seeking out and identifying the world's top investment strategies — whether they are internal to Russell or exist elsewhere — and put them to work in your portfolio.
¹The Russell LDI Target Duration Funds are collective trust funds which are bank-maintained collective investment funds managed by Russell Trust Company, a Washington State non-depository trust company, and are not registered mutual funds. The funds are only available to certain qualified employee benefit plans and government plans and are not offered to the general public.
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.
Liability-driven investment strategies contain certain risks that prospective investors should evaluate and understand prior to making a decision to invest. These risks may include, but are not limited to; interest rate risk, counter party risk, liquidity risk and leverage risk. Interest rate risk is the possibility of a reduction in the value of a security, especially a bond or swap, resulting from a rise in interest rates. Counter party risk is the risk that either the principal or an unrecognized gain is not paid by the counter party of a security or swap. Liquidity risk is the risk that a security or swap cannot be purchased or sold at the time and amount desired. Leverage is deliberately used by the fund to create a highly interest rate sensitive portfolio. Leverage risk means that the portfolio will lose more in the event of rising interest rates than it would otherwise with a portfolio of physical bonds with similar characteristics.
The Barclays-Russell LDI Index Series, calculated by Barclays Capital Inc. ("Barclays") and the Frank Russell Company ("Russell"), provides the liability driven investment methodology implemented in the selection criteria of the Barclays-Russell LDI Index Series without regard to any person. All rights in the Barclays-Russell LDI Index Series vest in Barclays and Russell. Any funds, products or other securities or investment vehicles using or based on the Barclays-Russell LDI Index Series are not sponsored, endorsed, or promoted by Barclays or Russell. NEITHER BARCLAYS NOR RUSSELL NOR THEIR AFFILIATES NOR THEIR LICENSORS SHALL BE LIABLE (INCLUDING IN NEGLIGENCE) FOR ANY LOSS ARISING OUT OF USE OF OR RELIANCE ON THE BARCLAYS-RUSSELL LDI INDEX SERIES BY ANY PERSON.
Indexes are unmanaged and cannot be invested in directly.