How can this be an disadvantage of CFMatching?
“…funds from a cash flow–matched portfolio must be available when (and usually before) each liability is due, because of the difficulty in perfect matching…”
Versus multiple liability immunization “MLI”
“…An immunized portfolio needs to meet the target value only on the date of each liability, because funding is achieved by a rebalanc- ing of the portfolio…”
Q: don’t the assets of the MLI also need to be ready to meet the liability due date? Why do they distinguish between a certain asset of the MLI and the cash from another asset from the CFMatching?
What am I missing here?
as usual, many thanks