Standard Life has increased the cash allocation within its with-profits fund to 15%. The group cit...
Standard Life has increased the cash allocation within its with-profits fund to 15%.
The group cites the uncertain short-term outlook for equities and worries over the robustness of corporate profits as reasons for the move.
The £36bn fund held 41.7% in UK equities and 15% in cash as at 1 October. The remainder was split 14.5% in property, 13.4% in fixed interest, 5.1% in European equities, 3.9% in other investments, 2.6% in Pacific basin equities, 2.3% in US equities and 1.5% in Japanese equities. This is a more than 10% drop in UK equity exposure since 28 September 2001 and a corresponding rise in exposure to cash investments.
Standard Life said it believed corporate earnings would recover in 2002 following the falls experienced in 2001 and had a more bullish forecast on growth prospects in the US and the UK than has proved correct.
This led it to maintain a high equity holding in the with-profits fund, which returned good performance for the first quarter of this year. However, the life company believes the short-term outlook for equities is uncertain.
The company has increased its cash weighting since June in response to this short-term uncertainty but still believes equities and property will outperform fixed interest and cash over the long term.
£1bn business since inception
Considered doing so in 2015
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