Investment Strategy for Insurance Companies

ABC Insurance Company is reviewing its investment strategy to better align its portfolio with the liabilities inherent in its life insurance products. As part of this review, the chief investment officer is considering the characteristics of the insurance portfolio, which is primarily focused on generating stable cash flows to meet policyholder obligations.

A significant portion of the portfolio is invested in fixed-income securities, with a targeted allocation of 60% to investment-grade bonds and 20% in corporate bonds. The remaining portion of the portfolio is allocated to equities, aimed at enhancing return potential. Additionally, the insurance company must maintain certain liquidity standards while managing interest rate risk.

Given this context, which of the following strategies would best complement ABC Insurance Company’s investment objectives?