The Premier Balanced Portfolio is modelled similarly to the Premier Conservative Portfolio, but with greater exposure to UK and overseas equity markets. These traditionally offer the greatest returns for an investor over the mid to longer term but are, by their nature, a more volatile investment. Both absolute return strategies and protected structured products play their part in a medium risk portfolio but, in the case of absolute return strategies, the weightings are reduced in favour of equity exposure. Due to their enhanced return structures, protected structured products are used widely in these portfolios, offering investors good exposure to positive equity returns and a protected downside.
As with the Premier Conservative Portfolio, the Premier Balanced Portfolio may also contain exposure to commodities and commercial property.
A significant proportion of the portfolio is currently invested in structured products as illustrated in the ‘typical asset allocation’ pie-chart above. Structured products are generally derivative-based products used to combine the potential upside of market performance whilst limiting the downside. They are typically linked to the performance of one or more underlying instruments or assets, such as options or indices, that may introduce significant risk, including counterparty risk, which could affect the portfolio’s performance. However, the portfolio manager will use structured products to help keep the portfolio’s volatility levels relatively low. More information about structured products and their risks can be found in the brochure.
Important: Investors need to refer to the Risk Warnings in the brochure and those contained in the Premier Portfolio Management Service Terms and Conditions when considering their choice of portfolio.