iAtoday
To optimize the risk/return profile, iA Investment Management (iAIM)* is changing the investment policies of the Asset Allocation Funds.
As a result, iAIM is making changes to the target allocation of these funds. The new targets are the result of a rigorous portfolio optimization process.
Fewer income funds equals better protection against risks related to interest rates
The weighting of income funds will be reduced to limit exposure to interest rate risk and make room for other classes of assets, mainly alternative asset classes that share many of the same defensive characteristics as fixed income, such as recurring income.
More foreign equities equals sound diversification for Canadian investors
The portion invested in foreign equity funds will be increased and an emerging markets mandate will also be added to the funds. This will enhance global diversification and make the Asset Allocation Funds less sensitive to changes in the Canadian stock market.
Better diversification with alternative/speciality funds
Alternative/speciality funds are generally less sensitive to financial market fluctuations. They also offer a stable and relatively high return potential for the same level of risk. For these reasons, we add private debt, commercial mortgage, infrastructure, and private equity mandates to our Asset Allocation Funds.
The changes will be gradually implemented over the next few weeks and will be completed by mid-December 2021.
To learn more about why iAIM's experts made these decisions, you can read the Investment Update on this topic.
You can also find more information on our Asset Allocation Funds in the information sheet.
The Asset Allocation Funds are a popular prebuilt solution for group retirement savings plan members who prefer to entrust the management of their investments to experts. The experts continuously monitor the funds that make up the Asset Allocation Funds and adjust the weighting of each asset class based on financial market developments, in accordance with the investment policies of each fund.
Impact for your clients
Your clients who offer the Asset Allocation Funds to their plan members and the plan members who currently invest in these funds do not have to take any action. The composition of the Asset Allocation Funds they hold at the time the changes are implemented will be automatically adjusted.
Plan sponsors who offer Asset Allocation Funds to their plan members will receive an email the week of November 8, notifying them of the improvements made to this investment option.
We are convinced that these changes will benefit group retirement savings plan sponsors and their plan members.
* iAIM is a subsidiary of Industrial Alliance Insurance and Financial Services Inc.