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Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012
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Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012

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Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012

Clarus' presentation on "Inside the Strategies" at the PensionSource Fund Manager Conference 2012

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  • 1. Clarus Investment SolutionsInside the Strategies November 28, 2012 1
  • 2. What Are the Strategies?Four Risk-Graduated portfoliosDrawn from shelfMonitoredRebalancedAdjusted Framed for use as Core DC choices 2
  • 3. Who Are We?Paul McCarville Chartered Accountant, QFA 4 years in corporate lending – Ulster Bank – 1983-1987 21 years at senior level in asset management Director / Head of Client Services & Marketing, Setanta, 1998 – 2007 Director, Verus Advisory Limited, 2011 -Joe Mottley B.E, M.Sc. (Public Sector Analysis), Associate Member of IIMR, QFA 22 years at senior level in asset management Director / Chief Investment Officer, Setanta, 1998 – 2007 Director, Diversification Strategy Fund, 2007 – Strategic Investment Advisor, Covestone Asset Management, 2010 – 2012 Director, Verus Advisory Limited, 2011 - 3
  • 4. What Do We Do ? DESIGN Strategic asset allocation Suggest providers RISK MODELLING Metrics Comparisons MARKETING SUPPORT Strategy Portfolios MONITORING TACTICAL Portfolio performance RebalancingComponent performance Asset allocation switches Analyse deviations Watch providers REVIEW Strategic asset allocation New/better/cheaper providers Asset class relationships 4
  • 5. Core Investment PrinciplesPassive (where viable)Costs Matter !RebalancingDiversification  Bonds Government/Long-Dated/Index-Linked/Corporate  Equities Global/High-Yield/Concentrated/Emerging Market 5
  • 6. Choice & DC Pension Funds – the Clarus viewChoice Quality of choice much more important than quantity In terms of number, the ’sweet spot’ is probably 4 to 6 Default crucial Managed/Consensus too volatile  massive Drawdowns (31% - 2001/02 and 46% - 2008/9)* Ideal will have lower volatility but modest loss of return Rebalancing a key element*ILAC Consensus 6
  • 7. More on DiversificationResearch ( e.g. NEST ) shows that DC members generally:  deal very poorly with losses, especially if recur  tend towards sub-optimal behaviour  are willing to forsake some return for moderation of risk Finally being understood by providers !!“Diversified Growth” funds taking over in UKSSgA change to its Managed FundNew Ireland change to IRIS 7
  • 8. Pension Source Strategy Portfolios100% Prop Comm Abs Return90%80%70% ABS RETURN COMMODITIES60% PROPERTY EQUITIES - Concentrated50% EQUITIES - EM EQUITIES - Small Cap EQUITIES - Global Equitiies40% EQUITIES - High Yield BONDS - Corp30% BONDS - Infl Linked BONDS - Long Govt BONDS - Govt20% CASH Bonds10% 0% Cautious Balanced Diversified Active ILAC Consensus 8
  • 9. Current Strategy Portfolios : Risk Metrics 9
  • 10. Performance and Volatility - StrategiesPeriod 30/6/09 to 30/9/12 Strategy Performance Volatility (%) (%) Cautious 25 5.9 Balanced 33 6.5 Balanced Plus 34 5.9 Active 37 8.2 ILAC Consensus 41 9.3 10
  • 11. Performance and Volatility - StrategiesPeriod 30/9/07 to 30/9/12 Strategy Performance Volatility (%) (%) Cautious 14 6.9 Balanced 9 8.6 Balanced Plus 14 7.8 Active -1 11.8 ILAC Consensus -8 12.3 Strategy portfolios at Jun-09 simulated back to Sep-07, with cash position reset from 10% to 3%. Actual portfolios from Jun-09 to Sep-12. 11
  • 12. Strategies: Further Risk Metrics 25.0%50% % of Months Down > 2% Maximum Drawdown45% 46% 20.0% 23%40% 20%35% 38% 15.0%30%25% 27%20% 23% 10.0% 12% 11%15% 9% 17% 5.0%10%5%0% 0.0% Cautious Balanced Balanced Active ILAC Consensus Cautious Balanced Balanced Active ILAC Consensus Plus Plus Simulation period Jun-06 – Sep-12. Strategy portfolios at Jun-09 simulated back to Jun-06, with cash position reset from 10% to 3%. Actual portfolios from Jun-09 to Sep-12. 12
  • 13. Risk/Reward Profiles - Strategies16.0% Pension Source Strategies Return vs. Risk14.0% (month-end prices, Jun-09 - Sep-12) New Irl Pacific Basin simulated data Setanta Equity Dividend12.0% Zurich 5*5 ILAC Consensus SL GARS PensionSource Active10.0% PensionSource Diversified New Irl Evergreen PensionSource Balanced Plus PensionSource Balanced8.0% Annual Return ILAC Consensus Cautious PensionSource Cautious6.0% ILAC Indexed €Zone Bonds4.0%2.0% Volatility0.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 13
  • 14. CostsStrategy Weighted AMCCautious 0.26% - 0.30%Balanced 0.30% - 0.34%Diversified 0.30%- 0.34%Active 0.34% - 0.38% 14
  • 15. Conclusions Questions of choice and Default crucial The Strategies from are viable alternatives Platform offers real choice at very keen pricing Build your own range of choice/Default tailor-make for clients Monitoring /re-balancing/reporting on Strategies by based on a service provided by Clarus 15
  • 16. Regulatory Notice• Clarus Investment Solutions is authorised by the Central Bank of Ireland under the Investment Intermediaries Act, 1995• The value of your investment may go down as well as up 16
  • 17. THANK YOU 17

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