Rob Booth


“The world seems to be controlled by central bankers, so it depends on what happens in that environment to determine the sort of volatility that could hit the markets.” Rob Booth, NOW:Pensions


protection against a market correction or a downturn. So there are different tools that you can use if you are further away from your endgame. Scott: On the DC side, if the £1,000 rises to £1,200 then it’s a bonus. If you build in equity protection so it only goes up to £1,100 your members would still be happy if it stops it going below £1,000. Booth: Because of the charge gap investment management budgets are tight, so you need to think about the cost of buying protection. I see protection as a bit like motor insurance. If you are driving along and you have a little prang, are you going to claim against it while your car’s still drivable, because you can only claim once, or wait for a complete write-off and then claim? There are other ways you can take risk out of the portfolio when markets drop by a certain percentage, but the trouble is when do you put risk back on again, it is the hardest thing by far. It is quite easy to work out when to take it off. All those things combined, particularly the cost angle, make it a nice-to-have. It could probably work in the flexible income draw-down space even more than the accumulation space. Drewienkiewicz: That’s the difficulty with a lot of these protection strategies. It is easy to put things on


12 April 2019 portfolio institutional roundtable: Managing volatility


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32