Investment & Portfolio Strategies
A new market exposure for asset managers, hedge funds, proprietary traders and institutional investors that want to invest around changing expectations of human life expectancy.
A new source of investment exposure
Investors already take views on rates, inflation, credit, commodities, volatility and many other economic variables. LIX creates a way to take a direct market view on life-expectancy expectations. A fund may believe the market is underestimating the effect of a new therapy, overreacting to a mortality shock or mispricing a particular part of the curve.
Portfolio use
For some investors, LIX may become a standalone strategy. For others, it may be one component of a broader portfolio, a relative-value trade or a way to diversify exposures that are driven by different forces than traditional asset classes. The exact use will depend on liquidity, mandate and investor objectives.
Why investors matter to the whole ecosystem
Speculators and investors are not peripheral to price discovery. They are part of what makes a market work. Their willingness to research, disagree and put capital behind a view can provide liquidity to institutions that want to transfer risk and can help the market incorporate new information faster.
The institution that wants to reduce risk needs someone willing to own it.
LIX is designed to bring natural hedgers and risk takers into the same market, creating the two-sided participation required for price discovery.