Strategies and Solutions
Risk-Controlled Fixed Income
NISA believes that fixed income markets offer opportunities to capitalize on moderate inefficiencies for predictable gains. Nonetheless, we believe there are limits to the amount of excess returns that can be generated absent tracking error that compromises the strategic rationale for fixed income. NISA manages portfolio risks with low tracking error and high information ratio targets relative to client benchmarks.
Pension Risk Management
NISA is a leader in liability-driven investing (LDI) and de-risking strategies for pension plans. We believe our risk-controlled style, our ability to customize, our market presence in long duration fixed income and derivatives, and our extensive experience working with pension plans and their advisors differentiate us in this space.
NISA is one of the largest derivative overlay managers in the world. We manage customized strategies across the derivatives spectrum, including beta overlay, duration overlay, options strategies, portfolio rebalancing, and alternative risk premia, among others. These programs demand both operational expertise and highly engaged client servicing.
Tax-Sensitive Portfolio Management1
For taxable investors, NISA believes the after-tax return, rather than the pre-tax return, is the appropriate measure of performance. Knowing and addressing the effects of client-specific tax circumstances are fundamental to NISA’s tax-sensitive mandates. Strategies may include loss harvesting, turnover management, dividend/interest management, and considerations of state and local tax regime.
NISA has been managing assets for defined contribution plans since its inception. Assignments include short duration bonds, stable value portfolios, and structuring, negotiating and managing stable value wrap agreements. Over the last several years, we began consulting with clients and providing research to help DC plan sponsors think about building better retirement outcomes for participants so they can plan to retire with greater confidence.
Long Duration Bonds
NISA specializes in long duration bond portfolio management. Our portfolios are often part of liability-driven investment strategies that emphasize a high degree of interest rate exposure and tight tracking error targets. Benchmark customization is common and frequently incorporates characteristics of the liability being hedged.
Short and Core Duration Bonds
NISA manages fixed income portfolios against both broad market (e.g., aggregate and TIPS) and highly customized benchmarks. Our risk-controlled approach to active management focuses on risk-adjusted alpha. Our style is often viewed as a complement to more aggressive strategies employed by other managers.
NISA is a leader in derivative overlay strategies, which deliver highly customized exposures and demand great attention to detail. Our size and experience give us deep product and operational knowledge, and we have invested in the infrastructure needed to manage such portfolios.
NISA manages low tracking error portfolios primarily for taxable clients who are seeking tax efficiency, but also for investors seeking custom factor tilts or environmental, social, and governance (ESG) objectives.1 Many of the assets in these strategies are managed for Nuclear Decommissioning Trusts (NDTs).
1NISA Investment Advisors, LLC does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein.