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 & International fixed interest, UK & International Equity and Property). Long-term volatility was broadly unchanged for all asset classes.
Ten-year expected returns for cash fell from 1.90% p.a. to 1.61% 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 6.99% p.a. to 6.70% p.a. The projected expected returns for UK commercial property also fell from 4.02% p.a. to 3.73% p.a.
With the fall in expected cash returns we have generally seen a slight decrease in the cash allocations, with a small increase in property and UK equities across the optimised portfolios
View the standard asset allocations as at March 2019