Research house van Eyk will change the strategic asset allocation for all its fund profiles, starting with the balanced fund, to better handle market volatility.
The decision follows increasing volatility in world sharemarkets, instability of global currencies, van Eyk research analyst of asset consulting Nigel Wilkin-Smith said.
The balanced fund profile will reduce allocations to Australian and global equities, domestic listed property and fixed interest.
“It is really important to diversify away some of the risk to expose yourself to some of the different type of assets,” Wilkin-Smith said.
“We have a more bearish view during recent historical performance [for Australian and global equities].
“Listed property is a loser through this process.”
The profile will add exposure to global listed property and infrastructure, alternative assets and increase allocation to cash.
Although Australia has a few listed infrastructure assets, international utilities looked like a better investment, Wilkin-Smith said.
In terms of alternative asset investments, the fund will add exposure to gold and increase exposure to commodities.
“We think gold in particular will provide a good defensive anchor in times of currency volatility, particularly the United States currency.”
Van Eyk will implement this fund profile in April to its Blueprint Balanced Fund, which has nearly $585 million in funds under management.
Theoretically, this new profile would have returned 14.21 per cent per year for three years, compared to 11.95 per cent for the older profile over the same period, Wilkin-Smith said.
The research house will also change the strategic asset allocations’ on its other Blueprint funds in April.
Over half of the top dealer groups use van Eyk’s research, the firm’s spokesperson said.
