December 2015 Update - Review to September 2015
Asset allocation quarterly review
The latest Towers Watson review of the economic assumptions underlying our platform optimised portfolios sees revised asset allocations this quarter.
Platform asset allocations
Asset allocations for the portfolios have changed very little for the most part, however where changes have occurred these have included:
- a small movement out of cash mostly favouring UK fixed interest. This is most notable at Risk Levels 3 to 5 with changes of between 2% to 5%. The movement is due to a reduction in Towers Watson’s return assumptions for both cash and UK fixed interest over the quarter. Corporate bond reductions have been moderated by the small expansion of credit spreads, from investors demanding a higher return for holding corporate bonds relative to UK Government bonds.
- slight alterations to equity allocations for most risk levels, with a small movement from UK to international equities due to minor changes in the forecasted returns and volatilities for the different geographic regions.
- a reduction in exposure to property for ISA, CRA and offshore bond portfolios for Risk Levels 6 and 7 (by between 3% to 4%) and Risk Level 1 (by 1%) due to reduced projected returns this quarter.
View the current platform allocations.