What The iFunds Process Aims For

The key to understanding how iFunds is bringing a new concept to the risk/return management of investing for pension schemes, requires recognition and acceptance by trustees and their advisers of three very important facts:

1. There should be no predetermined asset allocation, because this has serious flaws.

• Fixed interest Market 1993 – 1994:

• Equity Market 2000 - 2003:

2. The right investment class must be selected and then amended as conditions change.

• Each asset class has peaks and troughs, but not all at the same time.

3. It is possible to set an investment target return requirement coupled with an absolute return policy, and still achieve exceptional investment returns when conditions allow.

• Trustees have to decide on the level of volatility that is acceptable.

The iFunds process will identify the best performing asset classes from any predetermined group of asset classes and adjust as these change. Therefore it can be used in connection with:

• Global Equities, by way of Markets or Sectors etc;
• Commodities;
• International Property REITS;
• Fixed Interest; or
• Cash.

However, why only do half the job?

The iFunds process works to its fullest capacity when operating across all asset classes.

• Giving iFunds the freedom to select the best asset classes ensures that a scheme’s investments are focused on the best opportunities in the whole marketplace at all times.
• iFunds will then use Dynamic Asset Allocation to produce a required rate of investment return within the acceptable levels of volatility.
• When market conditions allow, the iFunds process will be aiming to exceed the “required” rate of investment return.

Using the iFunds dynamic process will help to change the way you operate your scheme and control your future funding requirements.

• Aim for absolute returns rather than accepting market downturns.
• Take the effect of currency exchange into account in your asset allocations.
• Agree a scheme-specific funding policy, which can be achieved, and avoid the serious consequences of not achieving the preset policy.
• Allow for excess investment returns when achievable within volatility limitations.
• Trustees and the sponsoring company have less shocks and more certainty with their investment policy.