Liability Driven Investment
Liability Driven Investment (“LDI”) is currently much-hyped by fund managers and journalists alike. Is LDI really the free lunch that we have all been missing out on?
It probably comes as no surprise that LDI is potentially useful in a range of circumstances. In a nutshell its key attraction is that it has the potential to narrow the range of future investment outcomes. However, reducing the risk comes at a price: that of reducing potential returns.
Read our Technical Notes on LDI and Interest rate and inflation risks to dispel some of the myths surrounding LDI and find out whether it has characteristics that might prove attractive to your own scheme's circumstances.
