A focus on LDI counterproductive for pension funds – M&G Investments

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An over-reliance on liability-driven investment (LDI) could prove counterproductive for pension funds, as complete asset matching can lead to missing investment opportunities, says David Lloyd, head of institutional portfolio management at M&G investments.

Inflation and interest-rate liability hedging have both surpassed £6 billion per quarter this year among UK pension funds, but Lloyd says this precise matching of assets to liabilities could leave a lot of residual value behind, damaging a por