April, 2014 – InvestorLiterature.com Review

Written by Bruce Grantier. Posted in InvestorLit Updates

This Review is an update of InvestorLiterature.com Review 2013(3) “Asset Mix: Pension Funds and LDI”. What happened in 2013 was “A Perfect Storm” for LDI strategies. Long bond rates and real rates rose significantly and equities performed very well in 2013, resulting in the best single calendar year improvement in pension funded status since 1957 (at least by my estimation). The case was made in the previous Review, that with rates at record lows and stocks appearing relatively cheap, to adopt an LDI strategy at this time could forego potential performance. We find this still to be the case, despite the recent rise in rates.

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