SEI Investments Company has launched the SEI Long Duration Credit Bond Fund designed to enable Canadian pension plan sponsors to improve liability driven investment strategies and minimize pension expense volatility.
The fund has been designed in a manner consistent with Fiera Capital’s CIA Method Accounting Discount Rate Curve (the Fiera Curve).
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According to SEI, the new long duration credit bond fund will invest in Canadian spread sectors and investment-grade corporate, provincial, and municipal debt in an effort to generate higher risk-adjusted yield relative to other sectors and risk-free assets.
The fund, benchmarked to a customized blend of long-term DEX indices, follows a top-down approach using economic forecasts based on key global market, political, and regulatory metrics and central bank policy evaluation to determine duration, yield curve, volatility, country and currency allocations, the company claims.
Andrew Kitchen, managing director of solutions and strategies at SEI’s Institutional Group, said: "A vital step in managing assets in tandem with liabilities requires selecting an appropriate discount rate to value those liabilities.
"The SEI Long Duration Credit Bond Fund is designed to generate a yield consistent with the 16-year duration point on the Fiera Curve, allowing plan sponsors to optimize assets with liabilities, and most importantly, to minimize the impact of the pension benefit on corporate financials," added Kitchen.
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