Review of Western’s Diversified Equity Fund
The Diversified Equity Fund (DEF) is one of the 15 investment options offered by the Western Retirement Plans, and it is the one that has the most assets. As of November 30, 2011 the fund had $436 million in assets, or 40.8% of all assets of the Retirement plans.
Western’s Joint Pension Board is undertaking a review of the investment policy of the Diversified Equity Fund. This will affect the type of investments that can be held in the Fund. If you are a member of a Western Retirement plan, your input and questions during this review are welcome. We will also keep you informed of the results of the review and any changes to the fund so that you can make informed decisions about the holdings in your Western Retirement Plan portfolio.
Two information sessions were held for Pension Plan members on January 16th and 18th, 2012.
Why is Western reviewing the DEF Fund?
Western undertakes regular reviews of all its funds. In the case of the DEF, the last time the fund was significantly modified was October 2008 when a 17.5% allocation to global equity was made. The new strategies were funded by a reduction in U.S. equities.
What are the goals of the review of the DEF Fund?
In short, our goal is to improve returns and reduce volatility. We believe that the changes coming out of this review will allow us to achieve this goal. More specifically, our strategy will involve:
- Capturing additional sources of potential return
- Adding diversifiers to the portfolio to lower the risk of the portfolio
How will the review be conducted?
The most important aspect of the review conducted by Western’s Joint Pension Board and the Pension team will involve an analysis the asset mix of the fund and consideration of new investments. You may view a list of the investments that are being considered.
Other areas of review include:
- The currency hedging strategy of the fund
- The manager line-up
- The breakdown between active and passive strategies
How do I know if I currently hold funds in the Diversified Equity Fund?
Log in to your Western Retirement Plan account. Choose “Balances”. There you will see what funds are held in your account.
- You may hold assets in the Diversified Equity Fund directly or:
- You will have holdings in the Diversified Equity Fund if you hold either of:
- Balanced Growth Fund (70% of this fund is Diversified Equity Fund)
- Balanced Income Fund (30% is this fund is Diversified Equity Fund)
- Since July 1, 2008, the Balanced Growth Fund has been the default option when members do not make an investment decision.
Timeline for the review:
October/November/December 2011 |
Review of goals and objectives, historical performance, information from investment managers, and possible new asset classes |
January 2012 |
Seek input from Western Retirement Plan Members |
March 2012 |
Optimize asset mix |
April/May 2012 |
Manager searches |
June 2012 |
Final fund approval |
