Our risk controlled approach incorporates setting limits on the Cautious Portfolio’s exposure to asset types and geographic regions. In addition to following the requirements of the IMA Cautious Managed sector, the fund will have a 40% minimum holding in bonds and cash to boost income and reduce volatility.

The Cautious Portfolio will comprise approximately 20 individual funds. The typical asset allocation shown should thus be regarded as an example of the fund’s holdings rather than an unchanging picture.

Investment Management Association Cautious Managed Sector

The New Star Cautious Portfolio’s asset allocation will be managed within the Investment Management Association (IMA) Cautious Managed Sector’s remit. The IMA is the trade body for the UK’s asset management industry. It has developed different investment sectors to help investors select a particular type of fund, be it by geographical area or by the type of assets the fund holds. For a fund to qualify for a particular sector it must adhere to the IMA’s sector specifications. The Cautious Managed Sector specifies that a fund must:

• hold no more than 60% in equities. The equities need not be confined to the UK but the 60% ceiling still serves to limit the overall volatility of the fund;
  
  
• have at least half of its investments denominated in sterling or euros. This policy helps reduce currency risk.