ABC Pension Fund is evaluating a new fixed income portfolio strategy that aligns with its liability profile. The fund aims to invest in bonds that closely match its projected cash flows for pension payouts. Management is considering an indexing strategy that replicates a broad bond market index. They want to ensure that this approach adequately addresses the pension fund's long-term liabilities while minimizing tracking error.

Which of the following statements about liability-driven investing (LDI) with an indexing strategy is most accurate for the ABC Pension Fund?