Charting the LDI opportunity set

A clear view of the U.S. long bond market is crucial for defined benefit plan sponsors seeking to hedge long-term liabilities. Our new map of the market can help sponsors understand the opportunities and challenges in the LDI universe and craft effective investment strategy.

Author: Colyar Pridgen, Senior LDI Strategist, Capital Group

The U.S. long bond market offers many options for defined benefit pension plan sponsors seeking to hedge plan liabilities. However, it can be challenging to navigate this market without a clear view of the types of bonds available for use in an LDI program. Further, the market has grown exponentially in recent years and its composition and credit quality have shifted over time. Our new map of the long bond market can help sponsors better understand this universe of long bonds, which is crucial for crafting an effective investment strategy.

American Funds Distributors, Inc., member FINRA.
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