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- Title
Portfolio Insurance.
- Authors
KINSLEY JR., RALPH L.
- Abstract
The article focuses on surplus management and its effect on the strategies of fund managers. It states that as of 1987, an estimated $50 billion in pension fund assets have portfolio insurance, also known as dynamic hedging, which uses the equivalents of deductibles and premiums but limits the amount of loss in pension fund assets rather than guarantee against losses. It mentions that the relaxation of regulations of the U.S. Employee Retirement Income Security Act of 1974 has allowed pension funds to use futures and options and that this, along with index funds and a prolonged rise in stock and bond prices led to the growth of portfolio management. It comments on the use of surplus management and suggests that portfolio insurance will be absorbed by surplus management.
- Subjects
UNITED States; PENSION trusts; ASSET-liability management; PORTFOLIO management (Investments); FINANCIAL management; HEDGING (Finance); LAW
- Publication
Financial Executive, 1987, Vol 3, Issue 4, p38
- ISSN
0895-4186
- Publication type
Article