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Enhancing the Cirilium Portfolios

Date: 04 December 2023

We’re pleased to announce that we’re in the process of aligning the strategic asset allocation (SAA) across all of the Cirilium Portfolios. This alignment will provide greater consistency across the Cirilium, Cirilium Blend, and Cirilium Passive Portfolios and brings with it some important enhancements to how we manage the portfolios.

Key takeaways:

  1. We’re increasing the number of individual asset classes and sectors we use to construct the SAA. We’ll be using more granular fixed-income building blocks. This will allow us to better refine the risk and return characteristics of the portfolios, improving their diversification.
  2. We’re aligning the SAA of the Cirilium Passive Portfolios with those of the other Cirilium Portfolios. For the Cirilium Passive Portfolios, this means equalising the regional equity allocations to match those of the Cirilium and Cirilium Blend Portfolios and introducing alternatives as an asset class. We expect to implement this by introducing a new passive fund that tracks a diversified hedge-fund index.
  3. These changes will provide an over-arching asset allocation for the Cirilium, Cirilium Blend, and Cirilium Passive Portfolios, which should help to improve risk-adjusted returns over time.

Greater alignment

Among the many changes we’re making to harmonise the SAA across all of the Cirilium Portfolios, is a re-calibration of our approach to fixed income.

This will see us adopt a more granular approach to the many underlying sub-asset classes within fixed income, while allowing us to more finely-tune our exposures to different regional government and corporate bond markets and to other, more specialist, areas.

Meanwhile, each portion of the overall fixed-income weighting will be consistent across all five risk levels, and across the Cirilium, Cirilium Blend, and Cirilium Passive Portfolios. This will also be the case with the regional equity market weightings of the portfolios.

This should help drive more consistent performance across the portfolios and enable investors to better understand the performance delivered by their portfolio.

Similarly, any future enhancements made to the SAA will be reflected across all three investment styles. This will ensure that all portfolios are able to take advantage of the research we employ in the creation of the SAA and any ongoing improvements in market dynamics.


Greater choice

We’re greatly expanding the capabilities of the Cirilium Passive Portfolios by increasing the breadth of underlying asset classes that can be held in the portfolios.

As part of the alignment of the SAA across the whole Cirilium range, we’re introducing an allocation to alternatives in the Cirilium Passive Portfolios.

This will further differentiate the Cirilium Passive Portfolios from many existing passive portfolio solutions on the market, as very few are currently able to allocate to alternatives.

The new allocation enables us to include exposure to a wide range of alternative asset classes, if we deem them suitable from a risk and return perspective. Initially, we will be targeting exposure to hedge funds and, in time, this allocation could also include exposure to commodities or infrastructure investments.

Currently, passive, hedge-fund tracking strategies aren’t widely available at an affordable price. Fortunately, our scale means we can partner directly with a leading external fund provider to launch a new product that meets our specifications and the needs of our investors.

We’re required to give formal notice of the change to the prospectus wording, so you can expect to receive this letter from the platform(s) in which you have clients invested in the Cirilium Passive Portfolios.

Depending on the individual platform you use, the platform may also issue a letter directly to your clients regarding the above changes. Neither you, nor your clients, need take any action in respect of this communication.

These enhancements come at no additional cost for your clients. They offer the opportunity for more consistent returns across the Cirilium Portfolios and for improved risk-adjusted returns at the portfolio level, without altering their existing risk profiles.

CJ Cowan

Portfolio Manager

Ian Jensen-Humphreys

Portfolio Manager

Sacha Chorley

Portfolio Manager