Asset allocation changes to our Core Risk Portfolios

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As part of our normal review process, we’re making some changes to the asset allocations of our Core Risk Portfolios, which you can see details of in the tables below this article. These changes will be effective from 25 April 2017.

What’s changing?

The main changes are the removal of property exposure and increase in cash exposure across all seven portfolios.  Property exposure had previously been gained via the Property fund.

Why are these changes being made?

We use independent consultant, Morningstar Investment Management Europe Limited (Morningstar), to help us build and manage the Core Risk Portfolios. Morningstar takes strategic and tactical asset allocation decisions with the aim of meeting their two primary objectives, which are:

- to keep within targeted risk ranges over a market cycle (which can last three to five years or even longer), and
- to deliver the best possible performance for the amount of risk taken.

To meet these objectives, Morningstar regularly reviews the portfolios and recommends changes it believes will help the funds best achieve these objectives.

Morningstar said:

‘UK Commercial Property, which includes direct investments in offices, industrial and retail space, has been a strong contributor to the portfolios performance over the last three years. However, given the narrowing of yields on offer from UK commercial property and the limited capital growth prospects, the asset class is deemed less attractive. As a result, we have taken the allocation to zero.

Cash weightings have been increased across the board due to ‘the continued lack of attractiveness from most equities and fixed income assets’

Past performance is no guide to future performance. There’s no guarantee that the funds will meet their objectives. Investors may get back less than originally invested.

What does this mean for investors?

Existing investors don’t need to do anything. There are no other changes to the Core Risk Portfolios.

We’ll update our literature with these changes from 25th April 2017 onwards so you may notice both the old and new fund details in use for a time. If you would like more information, please speak to your financial adviser. You can find one in your area at unbiased.co.uk.

Conservative Core RiskOld allocationNew allocationDifference -/+
SE UK Corporate Bond 22.0% 21.0% -1.0%
SE Cash 18.0% 27.0% 9.0%
UK Gilts All Stocks Tracker Fund 14.0% 13.0% -1.0%
Overseas Government Bond Tracker Fund 9.5% 10.1% 0.5%
SE UK Index-Linked 9.0% 7.0% -2.0%
Overseas Corporate Bond Tracker Fund 8.5% 8.9% 0.5%
UK Equity Tracker Fund 7.0% 7.0% 0.0%
SE Property 4.0% 0.0% -4.0%
Continental European Equity Tracker Fund 3.0% 2.0% -1.0%
North American Equity Tracker Fund 3.0% 2.0% -1.0%
Japan Equity Tracker Fund 2.0% 2.0% 0.0%

 

Cautious Core Risk  Old allocationNew allocationDifference -/+
SE UK Corporate Bond 20.0% 19.0% -1.0%
UK Equity Tracker Fund 16.0% 16.0% 0.0%
SE Cash 12.0% 19.0% 7.0%
UK Gilts All Stocks Tracker Fund 11.0% 10.0% -1.0%
SE UK Index-Linked 7.0% 6.0% -1.0%
Overseas Government Bond Tracker Fund 6.9% 7.4% 0.5%
Overseas Corporate Bond Tracker Fund 6.1% 6.6% 0.5%
North American Equity Tracker Fund 6.0% 5.0% -1.0%
Continental European Equity Tracker Fund 5.0% 4.0% -1.0%
SE Property 4.0% 0.0% -4.0%
Emerging Markets Equity Tracker Fund 3.0% 3.0% 0.0%
Japan Equity Tracker Fund 3.0% 4.0% 1.0%

 

Balanced Core RiskOld allocationNew allocationDifference -/+
UK Equity Tracker Fund 23.0% 23.0% 0.0%
SE UK Corporate Bond 18.0% 17.0% -1.0%
SE Cash 8.0% 14.0% 6.0%
Continental European Equity Tracker Fund 7.0% 7.0% 0.0%
North American Equity Tracker Fund 7.0% 7.0% 0.0%
UK Gilts All Stocks Tracker Fund 7.0% 6.0% -1.0%
Overseas Government Bond Tracker Fund 6.4% 6.9% 0.5%
SE Property 6.0% 0.0% -6.0%
Overseas Corporate Bond Tracker Fund 5.6% 6.1% 0.5%
Emerging Markets Equity Tracker Fund 5.0% 5.0% 0.0%
Japan Equity Tracker Fund 4.0% 5.0% 1.0%
SE UK Index-Linked 3.0% 3.0% 0.0%

 

Balanced Plus Core RiskOld allocationNew allocationDifference -/+
UK Equity Tracker Fund 27.0% 27.0% 0.0%
SE UK Corporate Bond 12.0% 11.0% -1.0%
North American Equity Tracker Fund 10.0% 10.0% 0.0%
Continental European Equity Tracker Fund 9.0% 9.0% 0.0%
Emerging Markets Equity Tracker Fund 7.0% 7.0% 0.0%
Japan Equity Tracker Fund 6.0% 7.0% 1.0%
SE Property 6.0% 0.0% -6.0%
Overseas Government Bond Tracker Fund 5.3% 6.4% 1.1%
SE Cash 5.0% 10.0% 5.0%
Overseas Corporate Bond Tracker Fund 4.7% 5.6% 0.9%
UK Gilts All Stocks Tracker Fund 3.0% 2.0% -1.0%
SE UK Index-Linked 3.0% 2.0% -1.0%
Pacific Ex Japan Equity Tracker Fund 2.0% 3.0% 1.0%

 

Growth Core RiskOld allocationNew allocationDifference -/+
UK Equity Tracker Fund 32.0% 33.0% 1.0%
North American Equity Tracker Fund 12.0% 12.0% 0.0%
Continental European Equity Tracker Fund 10.0% 11.0% 1.0%
Emerging Markets Equity Tracker Fund 8.0% 8.0% 0.0%
Japan Equity Tracker Fund 8.0% 9.0% 1.0%
SE UK Corporate Bond 8.0% 7.0% -1.0%
SE Property 7.0% 0.0% -7.0%
Pacific Ex Japan Equity Tracker Fund 4.0% 4.0% 0.0%
Overseas Government Bond Tracker Fund 3.2% 3.2% 0.0%
SE Cash 3.0% 8.0% 5.0%
Overseas Corporate Bond Tracker Fund 2.8% 2.8% 0.0%
UK Gilts All Stocks Tracker Fund 2.0% 2.0% 0.0%

   

Growth Plus Core RiskOld allocationNew allocationDifference -/+
UK Equity Tracker Fund 36.0% 37.0% 1.0%
North American Equity Tracker Fund 14.0% 13.0% -1.0%
Continental European Equity Tracker Fund 11.0% 13.0% 2.0%
Emerging Markets Equity Tracker Fund 11.0% 11.0% 0.0%
Japan Equity Tracker Fund 9.0% 10.0% 1.0%
Pacific Ex Japan Equity Tracker Fund 5.0% 5.0% 0.0%
SE Property 5.0% 0.0% -5.0%
SE UK Corporate Bond 5.0% 4.0% -1.0%
Overseas Government Bond Tracker Fund 2.1% 2.1% 0.0%
Overseas Corporate Bond Tracker Fund 1.9% 1.9% 0.0%
SE Cash 0.0% 3.0% 3.0%

   

Adventurous Core RiskOld allocationNew allocationDifference -/+
UK Equity Tracker Fund 37.0% 38.0% 1.0%
North American Equity Tracker Fund 20.0% 16.0% -4.0%
Emerging Markets Equity Tracker Fund 14.0% 14.0% 0.0%
Continental European Equity Tracker Fund 12.0% 13.0% 1.0%
Japan Equity Tracker Fund 10.0% 12.0% 2.0%
Pacific Ex Japan Equity Tracker Fund 7.0% 7.0% 0.0%

 

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