As part of our periodic review of our Multi-Management Funds, we will be making changes to the fund composition effective November 30, 2018. This is in line with our management philosophy for the Multi-Management Funds, the goal of which is to optimize long-term expected return for a given level of risk.
The main changes are as follows:
- To increase diversification, we are increasing the target allocation to foreign securities within the fixed-income component from 20% to 30%. Additional exposure will come mainly from the Vanguard Global Fixed Income Index Fund. In connection with this change, the benchmark for the Funds’ fixed-income portion will now be made up of 70% FTSE Canada Universe and 30% Bloomberg Barclays Multiverse hedged.
- The allocation of funds within the foreign large cap equity component has been revised to optimize complementarity in terms of style. Among other things, this change involves the addition of the Acadian Global Managed Volatility Fund.
- To increase expected long-term returns and reflect the region’s growing weight in the MSCI All Country World Index, we will increase the target allocation to emerging markets equities within the foreign equity component from 7.5% to 10%. Additional exposure will come mainly from the DFS BlackRock® MSCI Emerging Markets Index Fund.
These changes won’t affect pricing.
To optimize the rebalancing process used with respect to our internal portfolios of funds, neither the Multi-Management Funds nor the Desjardins 30/70, Desjardins 50/50, Desjardins 70/30 or Desjardins 90/10 funds will be rebalanced systematically on a quarterly basis. Starting on February 28, 2019, we will analyze their asset allocation at the end of each month and rebalance only when specific limits are exceeded.
For the total weightings in fixed-income securities and growth securities, relative limits will be set at 25% of the target, whereas these limits will be set at 30% of the target for the other asset classes. If one of these limits is reached, the portfolio will be completely rebalanced.
In addition, within each asset class, relative limits will be set at 30% of the target for each underlying fund. If the limit is reached, the fund will be rebalanced at the asset class level only.
If, despite these limits, a portfolio does not undergo a complete rebalancing over a 12-month period, all assets in the fund will be systematically rebalanced.
For more information about these changes, please contact your Client Relationship Manager.