Liability-driven investing implementation
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 launched six target duration LDI commingled funds, which 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 tilts 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.
¹Russell Investments' LDI Target Duration Funds are collective trust funds which are bank-maintained collective investment funds managed by Russell Investment 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 Bloomberg Barclays LDI Index Series calculated by Barclays Risk Analytics and Index Solutions Ltd. (“Barclays”) provides the liability driven investment methodology implemented in the selection criteria of the Bloomberg Barclays LDI Index Series without regard to any person. All rights in the Bloomberg Barclays LDI Index Series vest in Barclays and Russell Investments Group LLC (“Russell Investments”). Any funds, products or other securities or investment vehicles using or based on the Bloomberg Barclays LDI Index Series are not sponsored, endorsed or promoted by Barclays or any of its affiliates, and neither Barclays nor any of its affiliates acquires any relationship with any investor upon making any investment in any such product, fund or security. NEITHER BARCLAYS NOR RUSSELL INVESTMENTS NOR THEIR AFFILIATES NOR THEIR LICENSORS SHALL BE LIABLE (INCLUDING IN NEGLIGENCE) FOR ANY LOSS ARISING OUT OF USE OF OR RELIANCE ON THE BLOOMBERG BARCLAYS LDI INDEX SERIES BY ANY PERSON, NOR SHALL EITHER PARTY BE LIABLE IN RESPECT OF THE ACCURACY OR COMPLETENESS OF THE BLOOMBERG BARCLAYS LDI INDEX SERIES.
Indexes are unmanaged and cannot be invested in directly.