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It is 5 years since we added the Compass Range of funds to the Friends First multi-asset offering. Compass is a range of target risk multi-asset funds designed to deliver broad diversification through strategic asset allocation. This is achieved by gaining exposure to a globally diverse mix of asset classes, investment styles and investment managers. The Compass Range is unique as it tends to favour index tracking funds to keep overall fund expenses lower.
5 Strong Years
Each fund in the Compass Range is aligned with a specific risk profile and is designed to maximise the potential return for its given level of risk. Over the past 5 years this strategy has proven very successful as can be seen from the returns and risk management detailed below.
The Friends First Multi-Asset Approach
The fundamental goal of the Friends First approach is to maximise the potential return subject to the target volatility of each fund in the Compass Range.
Asset allocation is often viewed as the most important decision in the investment process and for diversified portfolios a key determinant of performance. In simplest terms our approach aims to gain exposure to a globally diverse mix of asset classes, styles and managers helping to spread risk and reduce the impact of market volatility.
Strategic asset allocation is at the core of our portfolio construction approach. We do not engage in tactical asset allocation as we do not believe in the ability to successfully and consistently time markets, i.e. to switch from equities to defensive asset and vice versa in anticipation of major stock market moves. Also, over the long term, the cost of switching investments will invariably lead to higher transaction costs and lower returns. We prefer to set strategic asset allocation weights for each risk profile and rebalance back to set weights as markets move.
The Compass Range will, where appropriate, favour index tracking funds to keep overall fund expenses lower. Index tracking funds simply replicate the market by delivering the investment return of a specific index at a low cost.
Find Out More
Our Compass Portfolio Funds are available across the Friends First suite of Pension, Approved Retirement Funds (ARF), Approved Minimum Retirement Funds (AMRF) and Savings and Investment products.
Remember to visit our ABC Investment Journey to help guide your clients through their investment choice and decisions.
*The Sharpe ratio is a statistical measure indicating the amount of return generated by the fund per unit of risk.
This article is for Financial Broker use only.
The funds referred to on this page may be linked to an insurance-based investment product and the Key Information Document (KID) for this product is available at www.friendsfirst.ie/kids. The Risk Ratings of the funds referred to in this document differ from the corresponding Summary Risk Indicators shown in the KID. An explanation of the differences between the Risk Rating and the Summary Risk Indicator is available at the location above.
Warning: If you invest in this product, you may lose some or all of the money you invest.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment can go down as well as up.
Warning: Funds may be affected by changes in currency exchange rates.