We believe that pension schemes can better align their assets and liabilities with a buy-and-maintain approach to credit investing. This approach helps investors avoid the usual pitfalls of benchmark investing by reducing transaction costs and reinvestment risks.

Long-term investors can benefit from the extensive experience we’ve gained from managing Aviva’s annuity book and our detailed understanding of managing pension fund assets, including $24 billion of buy-and-maintain credit strategies.1

This more focused approach to managing credit makes it ideal for long-term investors such as pension schemes and insurance companies. It is an ideal building block for a portfolio with a long-term outlook and complements other strategies focused on growth, alternative income and liability driven investment.

The benefits of buy-and-maintain include:

  • Lower turnover.
  • Lower transaction costs.
  • Lower reinvestment risk.
  • Focus on absolute credit risk.
  • Cash flow generation.

We can deliver a broad range of tailored credit strategies to meet each client’s specific objectives and requirements. They can complement traditional fixed income mandates or form part of a wider liability-aware strategy. 

Why buy-and-maintain credit?

Our buy-and-maintain credit framework allows for:

  • Fundamental differences between an annuity client and pension scheme.
  • Flexibility to meet a wide range of pension scheme requirements.
  • Individual parameters and reporting requirements for each scheme.

Pension schemes

For pension schemes our buy-and-maintain credit strategy can offer:

  • A better alignment of a scheme’s assets with its liabilities
  • Expected returns in line with funding requirements
  • Reduced reinvestment risks and reduced transaction costs compared to a traditional benchmarked approach.

Detailed investment process

Portfolio managers and credit analysts work together to identify defensive credits. This involves:

  • Determining a range of investable credits for the mandate.
  • Identifying investment opportunities.
  • Portfolio construction.
  • Implementation and then regular monitoring of portfolios.

1 As at 31 March 2015

The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.