Built on solid foundations

Our multi-asset range of risk-targeted solutions

In a rapidly changing world, ensuring that your clients’ investments are aligned with their objectives and the level of risk they are willing to accept can be tricky. For ten years, our risk-targeted multi-asset fund range, the WS Canlife Portfolio Funds, has done just that, helping clients achieve long-term growth while staying within a defined risk band.

Our funds have weathered a changing market environment while maintaining a steady focus on delivering good customer outcomes in a consistent and well-controlled manner. Interested in learning more? Contact us today and let’s talk about how our multi-asset solutions can help your clients achieve their financial objectives.

The Portfolio Fund range is designed to be simple. It consists of five funds, each offering a specific risk level by investing in a different blend of global asset classes, to match different risk appetites. The concept is straightforward – the higher the number, the higher the risk. As the risk rises so does the potential return – and the likelihood of volatility. The lower the risk, the lower the potential return and volatility. We work in partnership with leading risk profiler Dynamic Planner to determine our risk profile asset allocations. This is because we believe that if a fund is a given profile, it should stay at that risk profile. We review and, if necessary, rebalance each risk-profiled portfolio daily to ensure that it is achieving its aims and risk-profile allocations.

This approach has helped ensure the funds’ resilient performance, as each of the funds has outperformed its respective comparator benchmark since inception.

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The main driver of this outperformance has been the Portfolio Funds’ choice of investments in underlying funds, depending on market conditions, while keeping to the set risk profiles and volatility boundaries. This allowed the funds to take account of shorter-term market trends and volatility, while still looking to achieve the long-term aims of the funds.

A risk-targeted approach is also highly relevant given the recent shift in the financial environment. Although the rise in interest rates has made cash investments increasingly attractive to investors, opting out of the investment markets altogether is unlikely to be a viable long-term solution. Risk-targeted funds offer a way of retaining access to investment markets, but in a controlled way, allowing investors to participate in the long-term trajectory of real returns. Owing to inflation, cash rates have not tracked CPI – meaning that investors need to put some risk on the table to enable them to potentially achieve their desired return. Using risk-targeted funds also removes the need to try to time the market, which comes with its own challenges.

At the core of the Portfolio Funds’ investment approach is the team’s top-down approach to asset allocation. The Portfolio Funds are mainly funds of in-house funds, meaning that they tap into the expertise of our fixed income, equity and property managers, who have wide experience of the various individual asset classes. However, they also have the ability to allocate to external funds or include index trackers depending on the multi-asset team’s views. The multi-asset team also adjusts fixed income duration depending on our view on the potential direction of global interest rates. This approach helps ensure that the Portfolio Funds stay closely aligned to their investment objectives. It also helps to keep costs under control.

Managing to a specified strategic asset allocation also helps mitigate potential behavioural biases which can skew investors’ – and managers’ – perceptions, causing them to allow shorter-term market movements to dictate longer-term goals.

When it comes to achieving long-term growth on behalf of your clients, ensuring that you are matching clients’ investment goals and attitude to risk is vital. Risk-targeted funds such as the Portfolio Range can offer a close match to a client’s objectives – and then, as risk-targeted funds have embedded volatility boundaries that stop them from changing risk profile, help to ensure that their investment continues to match their risk profile.

This offers another layer of governance for advisers, as it limits the need to review a client’s investment between pre-defined review periods. The FCA emphasised back in 2012 how important it considers the accurate alignment of the risk description of risk-rated funds with their actual risk profile to be. In other words, the risk profile of a client’s investment should only change when the client’s own risk profile changes.

Risk targeting contrasts with risk rating, an approach that gives a snapshot of the level of risk that a fund is taking at a given time. However, because the risk level is not central to its mandate, the level could change, and potentially also shift in line with the style or factor bias (for example, it could have ESG or income-focused objectives).

Multi-asset funds, in general, can be suitable for all types of clients – whether they’re accumulating wealth or are in the process of drawing down in retirement. They’re ideal for clients who want to be sure their investments are managed closely in line with the risks they’re willing to take but don’t want to pay the higher charges associated with a single investment solution.

The WS Canlife Portfolio Fund range could be a good fit for advisers looking for predefined multi-asset solutions aimed at a target market of clients who are looking for long-term growth within their assigned risk profile. By taking a longer-term view within the scope of the customer’s risk profile, the range can offer a straightforward way of meeting their needs both now and into the future.

Find out more about our Portfolio Funds

The Portfolio Funds are available on all major UK advisory platforms and within a wide selection of Canada Life’s offshore investment solutions.

Important Information

Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Currency fluctuations can also affect performance.

This document is issued for information only by Canada Life Asset Management. This page does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at https://www.canadalifeassetmanagement.co.uk/

Data Source - © 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Canada Life Asset Management is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Promotion approved 10/01/24