Pension funds go for inflation swaps
As pension funds look to longer-term liability matching strategies, inflation hedging products will be top of the menu, says Watson Wyatt’s Nick Horsfall
Changing markets and regulations have focused pension funds’ attention on improving benefit security for their members, and on maximising the efficiency of their investment portfolios. An important part of this equation is an understanding of the nature of the fund liabilities, the risks inherent in those liabilities, and how best to manage them.
Pension funds have traditionally sought a pragmatic hedge for these liabilities through investing in equities, bonds and property, with an aim of
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