Insurance Companies and LDI Strategies

A major insurance company, XYZ Life, is reviewing its investment strategy in light of increasing regulatory scrutiny and the need for enhanced asset-liability matching. The company issues long-term life insurance policies and is required to maintain a specific level of reserves to back these policies. Given the nature of its liabilities and the current low-interest-rate environment, XYZ Life is considering various investment options that align with its risk tolerance and regulatory requirements.

Which of the following investment strategies would best support XYZ Life's need to match its long-term liabilities with appropriate asset allocations while maximizing returns within acceptable risk levels?