Canada Life International (CLI), based in the Isle of Man, is launching three new funds of funds in partnership with Asset Risk Consultants (ARC). The funds are available through the CLI suite of products.
The three funds, CLI ARC Conservative, Balanced and Growth, will each comprise between eight and 15 funds chosen from the internal fund range available at CLI.
The internal range consists of a mix of funds from 29 fund managers, including BlackRock, Fidelity, HSBC and Schroders.
ARC will act in an advisory capacity to CLI, using various statistical techniques to derive the three fund portfolios. Every quarter ARC will rebalance each of the three portfolios based on several factors. Concentration on risk-adjusted returns and the dynamics of various fund combinations will be at the centre of its recommendations.
“I employed ARC to create three funds for me that will be rebalanced every three months,” says Mario Ricciardi, investment director at CLI.
Rebalancing can involve underlying fund changes as well changes to a fund’s weighting within the portfolio. “A client could sit in Conservative and hold the Threadneedle UK Growth fund, for example,” says Ricciardi. “If later that fund is not appropriate, it can be changed.”
CLI’s own fund model is based on portfolios that consist of 10 funds, which are not rebalanced. IFAs whose clients hold any of these CLI products can switch to the CLI ARC fund range free of charge.
“An IFA can go back to existing clients that hold CLI funds that are not adjusted and switch the 10 funds they have into one [of the three CLI ARC funds]. It’s free switching,” adds Ricciardi. “The three new funds are managed with stability most in mind,” he says.