Pension funds shun derivatives

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The majority of corporate pension funds have yet to implement derivatives in their risk management strategies, despite the recent drive towards liability-driven investments (LDI), according to a new survey of chief executives and treasurers at 100 FTSE 350 companies by the consultancy firm Mercer.

Only 6% said they had used interest rate derivatives and 4% inflation derivatives, with none having used contracts linked to credit risk.

Tim Keogh, a partner at Mercer, says UK funds are gradually

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