Liability-Driven Investing

The High Quality Corporate Bond strategies seek intelligent beta exposure to high quality corporate bond securities. The long duration product focuses on 20+ year maturities, which are typically used to construct pension liability discount rates. It can be combined with a 5-20 year maturity product to create an average duration that closely matches a client’s plan liabilities. Mellon Capital’s fundamentals-based, quantitative credit modeling process seeks to screen out riskier securities and determine credit quality independent of the rating agencies.

Our long duration bond index strategies use a systematic portfolio construction process to help minimize tracking error. A stratified sampling approach is used to duplicate each index’s fundamental characteristics and performance.

Our Alpha Plus strategies seek to mitigate plan asset-liability mismatch by combining an attractive alpha source with long-duration beta exposures. The alpha source is our Global Alpha strategy, which strives to systematically identify relative mispricings across capital markets in developed countries around the globe. The beta exposure is achieved through the use of derivatives and physical securities in an effort to maximize capital efficiency.