Securities Lending

Generating Returns in a
Low-Interest Rate Regime

With low-risk investments such as US government bonds at record low yields, many institutional investors are seeking other opportunities to generate alpha.

November 2020

In today’s yield-chasing environment where every basis point counts, the additional returns offered through a securities lending program can help support investors’ alpha generation goals.

Securities lending has traditionally been viewed as a way to cover costs associated with custody and other fees. Recent regulatory reforms, technology advancements and more transparent reporting all play a role in mitigating the risk factors associated with lending. Institutional investors now have multiple options to access the securities lending markets and unlock the potential to generate new sources of low-risk returns. Here, we explore how securities lending can impact the bottom line and the options available for investors to capture additional returns.