Scottish Life is reducing the equity component of its managed fund range and introducing asset allocation which it says matches policyholders' changing risk appetite.
It is cutting average equity exposure in its medium balanced managed fund from 82.9 per cent to 55 per cent. The defensive managed option rises from 21.2 per cent to 27.5 per cent and the adventurous option falls from 99.4 per cent to 75 per cent.
ScotLife says the new structure differentiates it from other providers using the ABI balanced managed sector average of 81 per cent in equities, including Standard Life at 83.6 per cent, Norwich Union at 79.6 per cent, Scottish Equitable at 82.2 per cent and Scottish Widows at 81.7 per cent.
ScotLife will use stoch-astic modelling to offer nine overall risk/timeframe opt-ions for low, medium and high risk across short, med-ium and long-term horizons.
Head of business development Graham Dow says: “We believe managed funds no longer offer a full diversification of assets. The average equity exposure in the sector is 81 per cent, with very little exposure to property, which is an important asset class for many savers. The risk profile of the funds does not allow sufficiently for the time horizon of the individual.”