Evaluating Pension Fund Strategies for Growth and Risk Management

A pension fund's investment committee is evaluating its current asset allocation strategy in light of changing market conditions and demographic shifts among its beneficiaries. The pension fund currently holds a diversified portfolio of equities, fixed income, and alternative investments. Recently, the committee has been considering increa\sing its allocation to equity securities to capitalize on anticipated growth in the market, while still maintaining a long-term focus on liabilities. However, some committee members caution against increa\sing equity exposure due to the potential volatility and the fund's upcoming liquidity needs.

They are also considering strategies to enhance returns and better match assets to liabilities. Which of the following strategies would most effectively address both the committee's goal of increa\sing returns while managing risks associated with equity exposure?