The latest Towers Watson review of the economic assumptions underlying the optimised portfolios available through our platform has resulted in revisions 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.
10 year expected returns for cash fell from 1.61% p.a. to 1.38% 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 fell from 6.70% p.a. to 6.45% p.a. The projected expected returns for UK commercial property also fell from 3.73% p.a. to 3.49% p.a.
We have generally seen little change in the optimised asset allocations with a small increase in UK equites and a decrease in international equities across the optimised portfolios.
View the standard asset allocations as at June 2019