Dedication strategy

Dedication strategy

Refers to multiperiod cash-flow matching.

Cash Flow Matching

The practice of matching returns on a portfolio to future capital outlays. That is, cash flow matching involves investing in certain securities with a certain expected return so that the investor will be able to pay for future liabilities. Pension funds and annuities perform the most cash flow matching, as they have future liabilities that are both large and relatively easy to estimate. Portfolios that perform cash flow matching usually invest in low-risk, investment-grade securities. The practice is also called portfolio dedication, matching, or the structured portfolio strategy.
References in periodicals archive ?
The announcement coincides with the Daimler group deciding its Fuso trucks and Mercedes-Benz trucks and buses businesses in Thailand will be managed by Daimler Commercial Vehicles Thailand (DCVT) as part of the groups global Customer Dedication strategy.