This has enabled us to develop a USP with 80 per cent of the mandate invested in traditional assets, allowing for a 20 per cent allocation to AXA IM’s strong alternative investment offering in order to provide our policyholders with additional diversification and potential returns.
These strong alternatives are not available in unit-linked format, lacking open-ended, liquid funds. The appointment also allows Foresters to explore and improve our ESG offering to support the increasing demands of investors.
We believe that diversification of our investment portfolios leads to an improved risk/return profile.
Spreading risk across different asset classes, investment styles and geographies improves the risk–return trade-off, and reduces the adverse impact of potential investment losses.
Because investment risk manifests itself at different times with different intensity, active rebalancing of the portfolio is required.
So, while historically with profits plans may have received a bad press, with active management and focus there is a definite place in today’s investment market for these types of investments.
Erik Vynckier is interim chief executive of Foresters Friendly Society