State Street Global Advisors has made further enhancements to its liability-driven investing strategies following regulatory approval for 22 leveraged swap funds. 

The announcement follows the launch of 10 leveraged gilt funds in April and completes the planned product build-out of SSgA’s liability driven investment solution in the UK.

SSgA’s LDI solutions are aimed at offering pension schemes and institutional investors a way to extend inflation- and interest-rate protection in their liability-matching portfolios. The leveraged nature of the new funds helps provide further flexibility for schemes by allowing a smaller initial investment, thereby freeing capital to allocate according to a portfolio’s growth objectives.
 
Following regulatory approval for the 22 funds, which include nine leveraged interest rate swap funds, nine leverage real rate swap funds and four leveraged inflation rate swap funds, SSgA’s completed suite of LDI pooled funds now includes:

•         10 single stock gilt funds
•         10 leveraged gilt funds
•         Nine leveraged interest rate swap funds
•         Nine leveraged real rate swap funds
•         Four leveraged inflation rate swap funds
 
The new leveraged-swap funds cover maturities extending out to 2060 and can be used in tailored combinations with the single stock and leveraged gilt funds to suit the objectives and risk tolerances of a scheme. The suite complements SSgA’s conventional bond index funds, enabling investors to structure stable and cost-effective hedging portfolios.

Susan Raynes (pictured), head of the UK, Middle East and Africa at SSgA, says: “Our completed set of funds provides a strong foundation to offer clients a comprehensive and flexible solution for managing their liabilities. These funds, alongside our existing set of physical bond strategies and those leveraged funds we launched earlier in the year, provide extra flexibility for schemes so that they can focus on building asset growth in line with overall investment objectives.”