This site is for financial advisers only, Click here for the consumer site.

Share
Print
Print Share

Latest asset allocation quarterly review

September 2019 update – Review to June 2019

The latest Towers Watson review of the economic assumptions underlying the optimised portfolios available through our platform has resulted in some revision to asset allocations this quarter.

Over the quarter there was a decrease in the expected returns across all asset classes (UK cash, UK and international fixed interest, UK and international equity and property). Long term volatility was broadly unchanged for all asset classes.

Ten year expected returns for cash fell from 1.38% p.a. to 1.23% p.a., and these have a tendency to influence projected returns on other assets such as equities and property. The projected expected return for UK equities fell from 6.45% p.a. to 6.29% p.a. The projected expected returns for UK commercial property also fell from 3.49% p.a. to 3.34% p.a.

We have generally seen minor changes in the optimised asset allocations albeit with an increase in UK equites and a decrease in international equities of up to 5% across the optimised portfolios.

Following recent feedback, we are going to alter the way we quote economic returns in future updates. Historically the returns have been quoted gross of adviser fees, product/service fees and most additional active management fees that could apply for a typical fund in each asset class. However the stated returns have allowed for the deduction of some passive expenses (active for property) for assumed institutional funds for each asset class.      

Going forward we have decided to show a fully gross figure, not including the passive deductions. This will change the figures as follows:

 

 

 

Asset sector

 

Previously stated basis

 

Additional assumed expenses

 

Fully gross returns used in future

Cash

1.23%

0.05%

1.28%

UK fixed interest

1.21%

0.10%

1.31%

International fixed interest

1.62%

0.10%

1.72%

UK equity

6.29%

0.10%

6.39%

International equity

7.71%

0.10%

7.81%

Property*

3.34%

1.35%

4.69%

 

View the standard asset allocations as at September 2019

Financial Adviser Verification