Portfolio 3

Overall, your exposure to Fixed Interest is being reduced. With interest rates expected to rise in the New Year, Fixed Interest is a precarious place to have such a heavy weighting of your investments in; as previously mentioned, when interest rates rise, Fixed Interest typically falls.

Below is a comparison between your existing portfolio (left) and the recommended portfolio (right).

P3 - IMAGE 1

Further differences become apparent when considering a more detailed breakdown (on the next page).

UK Government Bonds and Gilts are excluded from the Fixed Interest section, and Global Bonds and High Yield Bonds are introduced instead; so you can see that Fixed Interest is further diversified this way. Emerging Markets have also been added to further diversify your equity holdings.

P3 - IMAGE 2

Now that you can see how Barrie & Hibbert have altered their asset allocation, we move on to how OBSR have selected the funds to fit inside these allocations.

A breakdown of your existing funds (Old) and the recommended funds (New) is as follows:


You will note that the Standard Life GARS fund remains unchanged. This fund was chosen by us when these portfolios were first created as an alternative to Fixed Interest. The idea behind this decision was not dissimilar from the reason of reducing holdings in UK Gilts now; to protect against the effects of Quantitative Easing.