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    A new approach to inflation protection

    Inflation protection for corporate bonds

    Insight has created a cost-effective strategy to help DB schemes with material corporate bond allocations improve the accuracy of their inflation hedges.

    Large allocations to corporate bonds can result in sub-optimal inflation hedges for scheme liabilities as, typically, such bonds do not provide inflation hedging. This would either need to be accepted by the Trustees or corrected by allocating additional capital to dedicated inflation hedging funds.

    To address this challenge, Insight has developed the Inflation-linked Maturing Buy and Maintain strategy. This provides access to a maturing portfolio of corporate bonds with an inflation overlay, providing regular cash flows which are linked to inflation expectations.

    In this video (see right), Philip Senior, Solution Designer at Insight Investment, explains how this new capability will enable schemes to increase allocations to corporate bonds without fear of negatively impacting the integrity of their liability hedges.

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