Institutional Investing

Liability Driven Investing (LDI)

Balancing risk-reduction and return enhancing imperatives to manage plan volatility

TD Asset Management (TDAM) has a long history of developing customized LDI solutions for our clients.  For portfolios with defined liabilities and obligations such as defined benefit pension plans, there are critical risks and objectives to be managed.

At TDAM, we firmly believe that there is no standard LDI portfolio. In every case, the unique needs of the plan, its sponsors and beneficiaries will ultimately determine the solution. Portfolio construction is dependent on the characteristics of the liabilities, the level of funding and the risk appetite of the sponsoring entity.

In developing LDI solutions, TDAM blends knowledge of actuarial science with robust proprietary portfolio analytics programs to align assets and liabilities in a holistic, disciplined and flexible portfolio construction process. The goal is to deliver a more stable- and positive- funded ratio over time.

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TD Portfolio Monitor:
Monitoring the effectiveness of liability driven investing

TD Asset Management (TDAM) has developed the TD Portfolio Monitor, a quarterly report that examines how LDI solutions can help meet future liability obligations.  Through a hypothetical model LDI portfolio, the TD Progressive Portfolio, we compare and contrast against more traditional 60/40 asset mixes as well as changes in pension liabilities. Made up of relatively straightforward strategies, the TD Progressive Portfolio exemplifies TDAM’s innovation and experience in LDI and how highly customizable solutions can be developed with your specific considerations in mind.  To receive a copy of the TD Portfolio Monitor, please contact your relationship manager.

To find out more about our progressive LDI solutions, please refer to the following informational pieces:
A Canadian Approach to LDI

    August 03, 2020