Insurers explore barbell investment strategies

Barbell asset allocation strategies are attracting interest from insurers as they position for rising rates and look to reduce Solvency II capital charges


Insurers seeking yield enhancement in their credit portfolios are exploring the benefits of using so-called barbell investment strategies.

A barbell strategy sees an insurer concentrate investments in two groups: long-dated, hyper-safe government bonds and short-dated, illiquid credits such as high-yield bonds, direct loans and real assets. The logic is that potential losses incurred on the short-dated assets will be counterbalanced by the stable returns from the long-dated sovereigns.


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