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Rebalancing a pension scheme portfolio to aim to take risk off the table can be a bit like fly fishing. It requires patience and the ability to strike fast when the opportunity arises.
Patience is required because, like waiting for the perfect trout, the right market conditions do not materialise every day. The ability to move fast is also essential because a window of opportunity, like our fish, may disappear as quickly as it appears.
There are many different approaches. Some funds rebalance at regular intervals, often quarterly, but many UK consultants also favour the use of funding level triggers. For example, where the funding increases to a set level, switches are triggered which typically decrease the growth portfolio and increase the liability hedge.
The process of rebalancing is easy in theory but can be tricky in practice. Some funds need to be sold, others bought, incurring cost and complexity and there is always the risk that fund prices may move against the fund when it is out of the market.
That’s one reason why many consultants advise their clients to use the Mobius Life platform. We make the rebalancing process quick and straightforward.
We monitor fund values and trigger points , reporting electronically to our clients, so they know exactly when to rebalance. And the process of rebalancing is straightforward too. Using our platform, funds can be automatically switched and out of market risk greatly reduced.
So, with the rebalancing sorted, that leaves more time by the river. J R Hartley would be delighted.
Mobius Life Limited 7th Floor, 20 Gresham Street, London EC2V 7JE
t: + 44 (0)20 7847 3300 f: + 44 (0)20 7847 3399 w: www.mobiuslife.co.uk
Mobius Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales at: 7th Floor, 20 Gresham Street, London, EC2V 7JE. Registered No. 3104978. For your security telephone conversations may be recorded.
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The value of investments, and the income from them, may go down as well as up and investors may not get back the amount originally invested.
Mobius Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Mobius Life Administration Services is not authorised or regulated.
Mobius Life Limited (Registered No. 3104978) and Mobius Life Administration Services Limited (Registered No. 5754821) are registered in England and Wales at: 3rd Floor, 20 Gresham Street, London EC2V 7JE.
For your security telephone conversations may be recorded.
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