MULTI-ASSET UPDATE FOR ADVISERS

Canada Life Investments and the advisory market

As we navigate through this period of unprecedented disruption, Canada Life Investments will continue to communicate how we address the impacts of the evolving coronavirus pandemic. You can read about the steps we have been taking to look after our employees, customers and the UK advisory community here.

The global markets have been experiencing historic levels of volatility since late February, as investors face an unparalleled economic downturn due to the spread of the coronavirus around the world. Our fund managers have been monitoring the impacts on the financial markets and continue to do their part in mitigating risks across our range of funds. Meanwhile, senior management has been implementing our business continuity plans to ensure we operate as normal as far as possible, and meet your needs during these challenging times. 

Are you still open for business?

Yes, Canada Life Investments remains open for business.

Is your office still open?

Our employees are at the heart of everything we do. As such, we are fully committed to protecting their health and safety and, in line with government advice, we have arranged for staff at our Lombard Street office in London to work remotely from home.  

Does this impact business as usual?

We continue to operate as business as usual and have set-up more online capabilities to ensure our employees continue to meet your investment needs and enquiries.

What is the best way to contact you?

The best form of contact remains via email to andrew.morris@canadalife.co.uk or by phone on 020 7415 6509.

Have there been any process changes or delays to the buying of our funds?

No changes or delays have been made to how our funds are bought. Read our FAQs here for more information.

Portfolio Funds III to VII and Managed Funds – Update from Craig Rippe, Head of Multi-Asset

We have been reviewing our asset allocations daily and have made our core active management decision to rebalance where appropriate, rather than daily, for more effective downside risk mitigation given the extreme market swings. Initially, as the coronavirus set in, we let the underweight in equities drift by 1-2%. More recently, we have been allowing the underweight to drift up to 4% and using redemptions as opportunities to rebalance.

In addition, we have been actively managing the subsector allocation deviations too. For example, North American equities have been outperforming and UK equites underperforming.  We have allowed these weight differences to continue as we felt the outperformance was likely to persist for some time.

The graph below highlights our decision to rebalance less regularly by showing that, had we continued to rebalance daily over recent months, performance would have been lower by more than 0.6%. 

Source: Morningstar Direct

Within the fixed income positions, the portfolio funds and managed funds hold an allocation in short duration corporate bonds. Today our allocation sits at 40% towards short duration, which has benefited the portfolio funds because short duration bonds have outperformed longer duration corporate bonds since the coronavirus pandemic started hitting the markets.  

Source: Morningstar Direct

Moving forward, within our US equity allocation we have increased our tech-heavy Nasdaq exposure. As the world is experiencing more lockdowns and sustained remote working, it is ever more dependent on technology to operate and connect. We believe tech will continue to thrive as companies rely on it to function and survive in the economic downturn.

In 2019, we switched up to half a percent of the funds’ 5% total property allocation into REITs to boost liquidity. This has worked well to help manage rebalancing and fund-flow volatility in March. 

Do not hesitate to contact us.

Thank you for your ongoing support,

Andrew Morris
Product Specialist
Canada Life Investments

 

Important information

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 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.

Data Source - © 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

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.

CLI01590 Expiry 31/03/2021

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