FTAM Introduces New Fixed Income Strategy

June 14, 2006 (PLANSPONSOR.com) - Fifth Third Asset Management (FTAM) introduced a new fixed income strategy to take on growing liabilities that could cause benefit plans to be underfunded.

FTAM launched its 22nd institutional investment approach: Liability Driven Investment (LDI) Solutions, a fixed income strategy that will manage funding risk profiles, according to a news release.

Keith Wirtz, FTAM’s president and chief information officer, said in the news release that the new strategy will also allow the company to cover the liabilities’ present value and gradually build a funding surplus. FTAM’s LDI approach involves understanding and managing investor’s funding risk profile, “allowing us to immunize liabilities and then add an alpha overlay to a portfolio, covering the present value of liabilities and building a funding surplus over time,” said Wirtz.

FTAM contends in the release that LDI strategies may be a solution to a growing problem, explaining that for the past five years, liabilities have grown.

FTAM is an asset management firm providing investment advisory services to institutional investors, private accounts, and mutual funds offering value, growth, core, and quantitative equity strategies as well as short-term, intermediate, and core fixed income strategies, according to the announcement.