The DB End Game - Helping Schemes Prepare for the Finish Line
Recent years have seen trustees and corporate sponsors of defined benefit (DB) schemes explore ways of managing and reducing risks as they meet their obligations to members. We discussed the routes available in our paper, ‘Demystifying the DB End Game’.
As a leading global fixed income manager, State Street Global Advisors can offer clients the full range of derisking capabilities, including liability-driven (LDI) and cashflowdriven (CDI) investment and Target Leverage Funds. Here, we present three hypothetical case studies showing how we could help our clients reach a stronger position on their end game journey. The three DB schemes outlined start with different challenges, but could ultimately achieve more certainty over their scheme risks and
The solutions we could provide all include LDI strategies to better match inflation and interest rate risks, while using leverage to free up assets to be invested elsewhere. The strategies also involve CDI allocations that help meet scheme payments to members without the need to become forced sellers of assets in volatile markets.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
Images of NYSE Group, Inc. are used with permission of NYSE Group, Inc. Neither NYSE Group, Inc. nor its affiliated companies sponsor, approve of or endorse the contents of this program. Neither NYSE Group, Inc. nor its affiliated companies recommend or make any representation as to possible benefits from any securities or investments.