Working LDI Portfolios Harder

New regulatory guidance, product innovation and market opportunities mean 2026 is the year to look under the bonnet of your scheme’s LDI portfolio, because a quick tyre-kick is unlikely to keep your portfolio roadworthy. We believe all trustees should at a minimum undertake a “MOT” review of their LDI arrangements in 2026, and probably have a full service to really get the most out of existing arrangements.  For many Schemes, upgrading to a new model could more than pay for itself!

We recommend:

• Stress testing collateral waterfalls to ensure these remain efficient and robust. Add diversity and flexibility to your collateral asset pool, including with ABS and use of credit repo/TRS.
• Reviewing the structure and design of your LDI approach, including considering whether a segregated LDI approach could offer better flexibility and value for money.
• Consider upgrading your LDI manager’s toolkit to capture market opportunities.