Part of our ongoing commitment for our EMPOWER multi-asset funds is that we carry out an annual strategic review of the funds. This review helps to ensure the EMPOWER funds continue to be well positioned to meet their objectives around investment returns, risk and volatility management. Following the latest review, some new risk management tools are being added to the asset mix of the multi-asset funds within the EMPOWER funds range.
Impact of changes
The changes will be implemented throughout March 2017.
New risk management tools
- Around 15% of the portion of fund that is currently invested in equities will be replaced with an equity option strategy. The purpose of this particular strategy is to reduce some of the impact of stock market falls on the overall equity allocation and provide a more stable return stream over time. The strategy uses equity options to achieve this.
- The existing Low Volatility equity strategy will be extended to include emerging market as well as developed market equities.
- A new currency hedging process is being introduced on each fund’s equity exposure with the aim of enhancing returns by reducing the losses from currency exposures.
New strategic asset allocations
The funds will continue to be managed on a dynamic basis with tactical asset allocations around the strategic weightings within each fund. The table below sets out how the strategic asset mixes will be updated for the main multi-asset funds within the EMPOWER fund range.
Source: Irish Life Investment Managers, 2017
