The iSTOXX RiskFirst LDI Indices track the performance of GBP-denominated UK government and corporate bonds, and are optimized using RiskFirst’s proprietary cash-flow matching model to reflect typical liability profiles of UK defined benefit pension schemes. Liability-driven investment (LDI) is an increasingly important concept for defined benefit pension schemes, which are seeking to hedge against interest rate and inflation risk by investing in solutions that closely match their liability cash flows.

The iSTOXX RiskFirst LDI index family comprises a range of indices based on 12 distinct profiles, capturing member type, duration, type of indexation (pre- and post-retirement), interest rate and inflation sensitivity and tax-free cash component of typical UK pension schemes.

The iSTOXX RiskFirst LDI Longer Pre RPI (0/5) Post Fixed Index comprises nominal and inflation-linked UK gilts, weighted according to RiskFirst’s liability cash-flow profile targeted at deferred members of a UK defined benefit pension scheme with a longer duration. Pre-retirement indexation is RPI-linked with a floor at 0% and a cap at 5%, post-retirement indexation is fixed.