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Adviser  >  News  >  October 2008  >  Asset Allocation Survey Results

Asset Allocation Survey Results

Last month we asked you to choose what you think is a suitable asset allocation for a balanced investor with around ten years to go until retirement. We’ve analysed your answers and can now share the results.

Nearly 60% of respondents picked Allocation D, the same as the Scottish Life Managed Fund. This is split:

• 27% - UK Equities
• 25% - Overseas Equities
• 28% - Fixed Interest
• 14% - Property
• 6% - Cash

Asset Allocations

The graph below shows the spread of results:

What does this mean?

Perhaps unsurprisingly given the current financial turmoil, the most popular choice was the most diversified. It’s also poles apart from the asset allocation of the Balanced Managed Fund sector average, which you would expect to contain suitable funds for a balanced investor.

The latest figures taken from Lipper show a sector average weighting of 75% Equities, 0.9% Property, 14.9% Fixed Interest and 9% Cash.

Some investors may be surprised that Managed funds can invest up to 85% in Equities.

Given the popularity of Managed Funds, it’s not surprising that we are not the only ones questioning who the average Managed Fund is designed for.

The Pension Advisory Service view

Comments from the Pension Advisory Service – the industry experts – recently also questioned whether the average default fund is good enough and claimed that people who pay money into their pension schemes may not be aware of the amount of equities that some of these funds are exposed to. Visit the following site to read more: http://news.bbc.co.uk/1/hi/business/7664825.stm.

A balanced view?

Now might be a good time to check the asset allocation of your favourite Managed Fund and revisit your idea of balanced.