AUSTRALIA - Barclays Capital has launched an index in a bid to provide a solution for obtaining liquid inflation exposure in markets where access to inflation-linked instruments is illiquid or non-existent.
It said the product was based on a proprietary model that dynamically replicates inflation measures of a target country at various horizons, using a combination of liquid inflation swaps from the US, UK and EUR, achieving high correlations.
The optimised weights are then applied to the Barclays Capital US, UK and EUR Inflation Swap Indices, resulting in an inflation swap index for the illiquid target country, it added.
Inflation-Linked and Fixed Income Index Derivatives product manager Ralph Segreti said: "The INSPIRE Index framework provides a cost-efficient solution to investors wanting to gain exposure or hedge against Australian inflation."
This week's edition of Professional Pensions is out now.
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.
The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.