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Navigating inflation risks in the presence of financial liabilities

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by Jacobi
| 14/02/2024 13:00:00

In this paper, we summarise the impact of economic trends on inflation, and how they impact investors with financial liabilities. Given the complexities and importance of managing inflation risks, we highlight how scenario analysis can assist investors in combining Liability-Driven Investing (LDI) elements with Strategic Asset Allocation (SAA). Using case studies, we illustrate the real-world impact of varying inflation expectations on asset allocation and financial obligations.

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