Each Risk Target Managed Fund shares our asset allocation model’s risk definitions and forward assumptions and is closely reviewed on an ongoing basis by both the asset manager and by Dynamic Planner. As part of the RTM service, the asset manager agrees to adhere to the following commitments:
The expected volatility of the fund is targeted to stay within the ex-ante risk boundaries assigned to the respective Dynamic Planner risk profile
And / or the underlying portfolio is targeted to match the strategic asset allocations for the respective Dynamic Planner risk profile
They offer suitably diversified exposure (either directly or synthetically) to at least six asset classes included within the Dynamic Planner strategic allocations:
The underlying asset class exposure is managed in a suitably diversified manner
Derivative exposure is primarily used for efficient portfolio management
In order to satisfy these diversification levels, the RTM service only includes Dynamic Planner risk profiles 3 – 8.