A class balancing act

The traditional approach to asset allocation in the build up to retirement is, of course, well-known: a heavy weighting towards growth assets, such as equities, is gradually reduced over time to be replaced by cash and fixed income in the years leading up to retirement. The reduction in equity exposure lowers the volatility and means there is less likelihood of a damaging one-off event substantially reducing the value of the portfolio close to retirement. A higher fixed interest weighting can also provide a hedge against annuity rates falling. This well worn asset allocation approach is p...