Adviser > News > January 2010 > Changes to Governed Portfolio Allocations
Changes to Governed Portfolio Allocations
Our independent Investment Advisory Committee (IAC) met on 15 December 2009 and agreed changes to some of our Governed Portfolio, Managed Strategy and Managed Funds benchmarks. The following are the key changes:
Benchmark change
In depth
For more information on the reasons behind these changes:
The benchmarks for Governed Portfolios 4, 5, 7, 8 and 9 and the Balanced Short and Adventurous Short Managed Strategies have changed with effect from 12 January 2010. All have had exposure to equity reduced in favour of index linked and corporate bonds except Governed Portfolio 7 where equity exposure was reduced in favour of Property.
This change also affects the benchmarks for the Scottish Life Adventurous Managed and Scottish Life Managed funds as they are benchmarked against Governed Portfolios 4 and 5 respectively.
Tactical change
Tactical asset allocations for the above portfolios have also changed to maintain a neutral position against benchmark. The new actual asset allocations are:
| Governed Portfolios | GP4 | GP5 | GP7 | GP8 | GP9 | Adv Short | Bal Short |
| Equity | 67.5% | 55.0% | 82.5% | 70.0% | 45.0% | 75.0% | 55.0% |
| Corporate Bonds (15yr) | 7.5% | ||||||
| Corporate Bonds (10yr) | 17.5% | 7.5% | |||||
| Corporate Bonds (5yr) | 25.0% | 10.0% | 20.0% | ||||
| Index Linked Bonds (15yr) | 7.5% | ||||||
| Index Linked Bonds (10yr) | 12.5% | 7.5% | |||||
| Index Linked Bonds (5yr) | 20.0% | 5.0% | 15.0% | ||||
| Property | 17.5% | 15.0% | 17.5% | 15.0% | 10.0% | 10.0% | 10.0% |
Reasons for the change
For several months the IAC have continued to monitor the rise in long term equity volatility and its impact on the risk targets for each Governed Portfolio and Managed Strategy. At the recent meeting it was agreed that it was appropriate to change the asset allocation of some of the benchmarks to ensure they remain appropriate for their risk profile.
The next IAC quarterly meeting will be held on 23 February 2010.
Further information
For more details about how these changes may impact you or your clients, please speak to your usual Scottish Life contact or call us on 0845 60 40 800.
Please note that past performance is not a guide to the future. Prices can fall as well as rise. Investment returns may fluctuate and are not guaranteed.
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