The Multi Asset Portfolios (MAPS) highlight Irish Life’s on-going commitment to bringing the most appropriate and cost effective investment solutions for Defined Contribution (DC) pension schemes to the market place. In recent years, we have seen a growing number of DC schemes become ever more focused on investment risk control. Trustees and their advisors are seeking to provide DC members with fund options that dynamically manage investment risk while maintaining the potential for strong, inflation beating fund returns over time.
To provide clients with a solution to address this requirement, Irish Life has developed a range of Multi Asset Portfolios (MAPS). MAPS have been designed to deliver long term growth while managing volatility and reducing the potential for extreme falls in member pension fund values at times of stress in the market. MAPS differs from traditional managed funds in that its objective is to deliver target returns within stated risk limits through a blend of assets classes, investment styles and fund managers.
The MAPS funds invest in a range of asset classes including equities, bonds, cash and alternatives. Further diversification exists in each asset class e.g. included in the equity allocation are developed world, emerging market and minimum volatility equities and within the absolute return strategies are commodities, currencies and diversified credit exposures.
The return objectives are clear and reflect the risk profile of each of the MAPS range of funds. The table below sets out the strategic asset split of each MAPS fund.
| MAPS Solution | World Equities | Cash | Emerging Markets Equities | Low Volatility Equities | Bonds | Property |
Alternative Assets |
|---|---|---|---|---|---|---|---|
|
Multi Asset Portfolio 3 |
0%-26% | 5%-31% | 0% | 14% | 25.5% | 7.5% | 22% |
| Multi Asset Portfolio 4 | 0%-40% | 0%-40% | 0% | 20% | 10.5% | 7.5% | 22% |
| Multi Asset Portfolio 5 | 0%-50% | 0%-50% | 10% | 17.5% | 0% | 7.5% | 15% |
Source: Irish Life Investment Managers
Within each of the MAPs a dynamic asset allocation process is employed which switches between world equities and cash during times of severe market stress. This dynamic asset allocation process combined with the expanded asset mix significantly reduces the overall Portfolio volatility. The dynamic asset allocation strategy is called the ‘Dynamic Share-to-Cash strategy (DSC)’.
- Dynamic Share-to-Cash strategy - Efficient investment management requires performance down turns to be minimised during periods of falling equity markets, while maintaining positive performance potential over time. DC pension schemes are increasingly looking for dynamic portfolio management to deliver on this objective.
- Irish Life conducted significant research into how best to control portfolio volatility and specifically how best to minimise portfolios losing value in times of falling equity markets. As a result of this research, we developed a system for dynamically managing allocations between world equities and cash in order to reduce portfolio down turns and deliver low volatility to MAPS. In practice, this solution attempts to reduce a fund’s exposures to equities (increasing cash) before or during times of falling equity markets and reinvest in equities before or during equity market recoveries.
Going forward, we see the MAPS range of funds, as being a central part of our investment fund offering. The MAPS range has attracted some very significant mandates and the assets under management is continuing to grow at a very fast pace.
If you need additional information on the MAPS range of funds, we would recommend that you discuss it with your pension scheme advisor.
To find out more about the MAPS funds visit the Investment Centre for monthly factsheets.
