“What this allows you to do is if you have withdrawals at time of market pressure, you can essentially have this pool of cash available to satisfy withdrawals,” said Temple.
The advantage is that liquidity for credit default swaps peaks during moments of distress for financial markets as investors want to buy protection. As a result, they’ve tended to outperform their comparable peers in the corporate debt market, according to Adrian Helfert, head of multiasset strategies at Westwood Holdings.
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