Andrew Morris, Product Specialist
On March 22nd 2019 Canada Life Investments launched the LF Canlife Managed 20%-60% Fund, a low-cost managed fund of funds focused on long term capital growth.
How does the LF Canlife Managed 20%-60% Fund sit within our suite of other risk-profiled funds?
All of them are managed fund of funds – the LF Canlife Managed 20%-60% Fund is about long term capital growth, while the 0%-35% focuses on delivering long term capital growth and steady income with low volatility investments and the more diversified LF Canlife Balanced Fund on higher risk-returns.
As the chart below shows the LF Canlife Managed 20%-60% Fund fits neatly into our range of risk-profiled funds based on a broad universe of investments including domestic and international equities, corporate and government bonds as well as UK commercial property. Our 0%-35% and 20%-60% funds tend to hold more UK property investments than our peers because we believe this asset class is a good diversifer. Whilst the fund can invest up to 60% in equities, the exposure to equities is normally no more than 55% of the value of the fund.
Source: Canada Life Investments 01/03/19, Target Weights
How beneficial is it to invest in in-house funds?
This is important because by investing primarily in our own range of actively managed funds we are able to tap the vast experience of our in-house fund management teams and their long-term track records in individual asset classes. This allows the Co-Managers – Craig Rippe, Head of Multi-Asset and David Marchant, Chief Investment Officer – to focus on wider asset allocation decisions whilst leaving the stock-picking decision to the Canada Life Investments’ Fund Managers who are experts in their individual markets. This set-up not only enables Craig and David to assess in-house updates on the construction and activity within the funds but also allows them to keep product costs down. They also have the flexibility to invest in external funds or alternative markets.
How do the benefits of risk-profiled and risk-targeted funds differ?
Canada Life Investments offer a range of both risk-profiled and risk-target managed funds to meet the needs of investors’ varied risk appetites. Risk-target managed funds allow portfolios to match the risk tolerance of underlying investors by adhering to defined levels and externally-set asset allocations, whereas the Managers of risk-profiled funds can adjust risk and asset allocation within set bands depending on the Managers’ market views. With the LF Canlife Managed 20%-60% Fund, for example, Craig and David are able to alter asset weightings as they see fit.
What is appealing about risk-profiled funds given today’s geopolitical uncertainties?
Multi-asset managers tend to be less interested in what is happening quarter to quarter and more on what pans out over the next three to ten years. As Head of Multi-Asset, Craig carefully monitors horizon risk taking into account trends that affect growth and inflation over time; for example, changing demographics, urbanisation and aging populations. Understanding the bigger picture is key to multi-asset investment strategies.
The LF Canlife Managed 20%-60% Fund
Source: Canada Life Investments, 01/03/19
Considering the effect Brexit has had on sterling what are the potential benefits of having unhedged foreign exchange exposures?
Sterling has proved to be a Brexit barometer and its depreciation against major currencies since the EU Referendum in 2016 has enhanced returns in our Funds since so many company shares and bond issues in the global markets are denominated in US dollars (so our investments are worth more when converted back into sterling).
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Currency fluctuations can also affect performance.
The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document is intended to be used as a sales aid and does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at www.canadalifeinvestments.com.
The fund may invest in property funds that may be illiquid and subject to wide price spreads, both of which can impact the value of the fund. The value of the property is based on the opinion of a valuer and is therefore subjective.
Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
CLI01388 Expiry 30/06/2019