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ILIM Diversified Fund Range
Irish Life Investment Managers has launched a range of diversified funds which are of particular relevance to the Defined Contribution pension plan market.
This range of funds recognises the growing use of alternative asset classes within defined benefit pension plans and aims to provide access and liquidity to these asset classes in combination with more traditional asset classes such as developed markets equities, bonds, property and cash.
Within the range there will be a:-
Diversified Growth Fund which is aiming to deliver equity type returns but with lower volatility levels. The types of asset classes being accesses within this fund are developed world equities, hedge funds, European property, corporate bond funds, emerging market equities, and commodities.
The Diversified Balanced Fund is aimed at the traditional balance/managed options. Again this fund will invest in developed world equity markets but deliver lower volatility than traditionally associated with balance funds by diversifying across such assets as property, forestry, corporate bond funds, commodities and hedge funds. However, the fund will hold a significant allocation to bonds c.20%. The bond allocation will be a mixture of inflation linked bonds and greater than 5 year bonds.
The Diversified Cautious Fund is aiming to avoid negative returns over a rolling 3 year periods. By investing predominately in bonds (32.5%), property (16%) and Cash (10%) and then investing in assets classes with low levels of correlation such as forestry, commodities and hedge funds we believe this offers a new option in the conservative fund range.
Accounting and Funding Standard Impact
The increased importance of contribution and solvency volatility on corporate balance sheets and profit and loss accounts (as determined by accounting and regulatory funding standards) is generally driving a diversification and de-risking agenda.
The tightening of correlations between regional equity markets has increased the volatility of pension fund returns thus threatening the objectives of trustees and sponsoring employers alike in satisfying these more rigorous accounting and regulatory funding standards and in improving the predictability of pension contribution demands.
ILIM Balanced Alternative Funds
Constructing bundled solutions
Using the building blocks of the aforementioned alternative funds and our traditional indexed equity and bonds funds ILIM have developed a serious of “new balanced” funds for our institutional clients.
Irish Life Diversified Cautious Fund
The Irish Life Diversified Cautious Fund is a fund which combines a 25% allocation to bonds, a 15% allocation to indexed regional equities, a 17% allocation to cash with a 43% allocation to alternative asset classes. The fund is a low risk portfolio of assets designed to produce a lower level of expected return relative to a standard balanced fund with low levels of volatility.
The fund is particularly suited to defined contribution members as they approach retirement age and trustees seeking to preserve capital while remaining exposed to market return.
Irish Life Diversified Balanced Fund
The Irish Life Diversified Balanced Fund is a fund which combines a 25% allocation to indexed regional equities and 20% to indexed bonds with a 55% allocation to alternative asset classes. The fund is designed to produce a mid-range level of expected return with reduced levels of volatility.
The fund is particularly suited to defined contribution members with a moderate risk appetite and defined benefit schemes with specific return objectives but seeking to manage volatility in returns.
Irish Life Diversified Growth Fund
The Irish Life Diversified Growth Fund is a fund which combines a 40% allocation to indexed regional equities with a 60% allocation to alternative asset classes. The fund is designed to produce a higher level of expected return than a standard balanced fund but lower volatility relative to an all equity based fund.
The fund is particularly suited to defined contribution members targeting stronger long term returns and for defined benefit schemes with specific return objectives but seeking to manage volatility in returns.
Irish Life Diversified Alternatives Fund
The Irish Life Diversified Alternatives Fund is a fund which exclusively holds alternative asset classes with allocation between those asset classes undertaken in a balanced fashion. The fund is designed to be placed alongside the traditional regional equity and balanced managed allocations of defined benefit schemes in order to reduce overall volatility.
The fund recognises the desire amongst sponsoring employers and trustees to reduce risk and volatility in their return profile consequent upon more onerous accounting and funding standards.
To find out more please contact Irish Life Investment Managers on 01 7042414
ILIM looks forward to working with clients and consultants to ensure that ongoing investment needs are being meet.