equilibrium - aria private clients

EQUILIBRIUM

M U LT I A S S E T I N V E S T I N G

PLAN

DESIGN

BUILD

L i g h t e n i n g t h e l o a d

C O N T E N T S

I N T R O D U C I N G E Q U I L I B R I U M

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E Q U I L I B R I U M A T A G L A N C E ’

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T H E B E N E F I T S O F A U T O M A T I C R E B A L A N C I N G

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D I S C L A I M E R1 2

C H O I C E O F P O R T F O L I O S

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Equilibrium has been designed to help give balance and order to your investments.

Built using a range of equity and bond index funds, the portfolios offer broad diversification and automatic rebalancing at a low cost.

Each Equilibrium is portfolio is built with the investors risk appetite in mind. Catering for investors from conservative to aggressive.

How that benefits the investor?

Automatic rebalancing

Each portfolio is rebalanced every 6 months to ensure that the portfolio doesn’t drift out of it risk category and over expose the investor to certain investment risks.

Low cost

Equilibrium uses ETFs to build it’s portfolio, taking a passive approach to investing and cutting out the additional costs associated with actively managed funds.

Diversif icat ion

Each fund spreads it’s exposure across different asset classes and geographical regions. This allows an investor to widen their scope and reduce specific market or asset class risks.

I N T R O D U C I N G E Q U I L I B R I U M

A modest level of capital and income volatility may be expected, with investors accepting the possibility of a negative return once every seven to ten years.

Investors accept the possibility of a negative annual return occurring once every four to five years. Due to this, investments of this kind should be made for at least five years.

Investors accept a higher possibility of a negative return, which may occur once every six to seven years.

E Q U I L I B R I U M A T A G L A N C E

E q u i l i b r i u m p o r t f o l i o s h a v e a n i n c r e a s i n g l y h i g h e r e x p o s u r e t o i n t e r n a t i o n a l e q u i t y m a r k e t s i n r e l a t i o n t o t h e i r o v e r a l l r i s k c a t e g o r y .

CAPITAL PRESERVATION CAPITAL GROWTH

CAUTIOUS

EXPE

CTED

RET

URN

CONSERVATIVE

BALANCED

GROWTH

ADVENTUROUS

INTERNATIONAL EQUITY

DOMESTIC EQUITYFIXED INTEREST & CASH

ALTERNATIVES

INVESTOR RISK PROFILE

What is portfol io drift?

Portfolio drift is what can happen as different assets within your portfolio fluctuate in value at different rates. This can lead to the portfolio being overweight in a certain asset class and underweight in another. If left unchecked, overtime the portfolio could ‘drift’ away from it’s original asset allocation for your timeframe, risk and goals.

How does automatic rebalancing work?

In order to combat drift, periodically Equilibrium will buys and sells assets withing the fund to bring it back in line with your original asset allocation.

What are the benefits?

By rebalancing each portfolio in line with their original asset allocation, the portfolios remain within their own risk profile. This ensures that the you are is not exposed to a higher amount of investment risk than you wish.

Rebalancing automatically adds consistency to your investment approach. Reducing ‘behavioral risk’, where investors are likely to make adjustments to their asset allocation depending on market performance.

Investments don't continue to go up forever, so as an asset class increases in value, the chances of a correction, or a drop in value, also increases. By selling off some of the appreciated asset, you are taking your profits and reducing the impact on your portfolio if the asset drops in the following year.

When an asset class has just dropped in value, you have an opportunity to purchase the investment when it is cheap. And you are buying it with the profits from an asset class which has gone up in value.

As automatic rebalancing requires very little hand on management it remains to be an extremely cost efficient way of maintaining a risk profile within a long term investment.

The Equilibrium strategies invest into a range of Exchange Traded Funds (ETF's) to create a suite of ready made multi-asset portfolios. Each underlying ETF brings exposure to different regions and asset classes creating a well diversified portfolio. Each portfolio has a different risk profile, given the varying exposure to equities throughout the different profiles. There is no management fee, and with low cost ETF's means a very low total cost of ownership to minimise the drag of costs on performance

Equilibrium Portfolios OCF

Equilibrium 35% Equity Strategy 0.2%





Risk

• The value of equities can be affected by daily stock market movements. Other influential factors include political and economic news, company earnings and significant corporate events.

• The fund may not fully track its index due to the implementation strategy. For example, the timing of dividend payments and cash flows are some of the events that could lead to a mismatch in performance.

• Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment.

• The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.

T H E B E N E F I T S O F A U T O M A T I C R E B A L A N C I N G

C H O I C E O F P O R T F O L I O S

Strategy information

Risk Profile: Cautious

Management Style: Passive

Equity Exposure: 30-40%

Benchmark:: Composed of MSCI World Index and Bloomberg Barclays US Aggregate Bond Index

Dealing Frequency: Daily

Fund Structure: UCITS

US Equities

Global Equities

Corporate Bonds

Government Bonds

Real Estate

Commodities

Cash

US

Europe (Inc UK)

Emerging Markets

Global


E Q U I L I B R I U M 3 5 % E Q U I T Y S T R A T E G Y

T A R G E T A S S E T & G E O G R A P H I C A L A L L O C A T I O N

Passive Approach

Equilibrium’s approach looks to replicate market performance through the use of Exchange Traded Funds.

A cautious investor seeks maximum protection of capital combined with stability of income. The income from this type of investment is lower, and minimal capital growth may be expected. Similarly, liquidity is often a concern, and conservative investors are often prepared to accept a lower income in order to receive maximum liquidity. The return will be low and consistent when compared with returns from other investments.

Cost Effective

Cheap Underlying passive funds mean that charges offer less drag on the portfolioperformance.

Market Performance

By choosing to replicate the markets clients will participate in up markets aswellasdownmarkets and achieve true market performance


Risk Profile: Conservative



Benchmark::Composed of MSCI World Index and Bloomberg Barclays US Aggregate Bond Index



US Equities

Global Equities

Corporate Bonds

Government Bonds

Real Estate

Commodities

Cash

US

Europe (Inc UK)

Emerging Markets

Global


E q u i l i b r i u m 5 0 % E q u i t y S t r a t e g y


Passive Approach


Conservative investors are concerned about stability of income and protection of capital over the medium to long term. Modest capital growth is sought from investing a limited amount of capital in some growth assets in order to protect the real value of an investor’s capital. A modest level of capital and income volatility may be expected, with investors accepting the possibility of a negative return once every seven to ten years.

Cost Effective


Market Performance



Risk Profile: Balanced



Benchmark::Composed of MSCI World Index and Bloomberg Barclays US Aggregate Bond Index



US Equities

Global Equities

Corporate Bonds

Government Bonds

Real Estate

Commodities

Cash

US

Europe (Inc UK)

Emerging Markets

Global




Passive Approach


Balanced investors seek modest growth in capital to maintain, and possibly increase, its real value over the medium to long term. Balanced investors will select a mix of growth and defensive assets. A moderate level of capital and income volatility is tolerated in expectation of higher returns in the medium to long term. Investors accept a higher possibility of a negative return, which may occur once every six to seven years.

Cost Effective


Market Performance



Risk Profile: Growth



Benchmark:: MSCI World Index and Bloomberg Barclays US Aggregate Bond Index



US Equities

Global Equities

Corporate Bonds

Government Bonds

Real Estate

Commodities

Cash

US

Europe (Inc UK)

Emerging Markets

Global




Passive Approach


Growth investors seek a high level of capital growth and may be prepared to forgo significant investment income by investing mainly in growth assets, such as equities and property. A higher level of volatility is normally accepted in expectation of a higher return and more rapid wealth accumulation over the medium to long term. Investors accept the possibility of a negative annual return occurring once every four to five years. Due to this, investments of this kind should be made for at least five years.

Cost Effective


Market Performance



Risk Profile: Adventurous



Benchmark:: MSCI World Index and Bloomberg Barclays US Aggregate Bond Index



US Equities

Global Equities

Corporate Bonds

Government Bonds

Real Estate

Commodities

Cash

US

Europe (Inc UK)

Emerging Markets

Global




Passive Approach


Adventurous investors seek a high level of capital growth over the longer term. The trade-off for achieving this is a high level of short-term volatility, with the possibility of a negative return once every four to five years. Due to the greater risk, the minimum investment period should be seven years

Cost Effective

Cheap Underlying passive funds mean that charges offer less drag on the portfolio performance.

Market Performance

By choosing to replicate the markets clients will participate in up markets as well as down markets and achieve true market performance

ARIA Private Clients is a trading name of ARIA Capital Management (Europe) Limited. ARIA Capital Management (Europe) Limited is authorised and regulated by the Malta Financial Services Author- ity (www.mfsa.mt) and registered with the Central Bank of Ireland for conduct of business rules. Malta company number: C 26673. Registered office: Nu Bis Centre, Mosta Road, Lija, LJA 9012, Malta.

UK Tel: +44 203 137 3840 Email: [email protected] Website: www.ariaprivateclients.com

Address:

Nu Bis Centre, Mosta Road, Lija, LJA 9012, Malta.

The material in this brochure is provided for information purposes only; it is not an invitation to invest. Please refer to the terms and conditions for any services offered for detailed information. Please seek relevant professional advice before making any investment decision.

This document does not constitute an offer or solicitation to provide any investment services mentioned, by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.

ARIA is responsible for managing the portfolio in accordance with the stated investment objectives and risk profile. The professional adviser is responsible for advising the client as to the selection of a portfolio and for assessing the suitability of the chosen portfolio for the client on an ongoing basis. Advisers should carefully consider the information set out above before recommending an Equilibrium strategy to their clients.

The value of investments and the income paid on them can fall as well as rise. All investments involve risk and you may not get back the full amount of your investment and your investment may fail altogether, resulting in an entire loss. Past performance is not necessarily a guide to future performance.

I M P O R T A N T D I S C L O S U R E S

ARIA Private Clients is a trading name of ARIA Capital Management (Europe) Limited. ARIA Capital Management (Europe) Limited is authorised and regulated by the Malta Financial Services Author- ity (www.mfsa.mt) and registered with the Central Bank of Ireland for conduct of business rules. Malta company number: C 26673. Registered office: Nu Bis Centre, Mosta Road, Lija, LJA 9012, Malta.

UK Tel: +44 203 137 3840 Email: [email protected] Website: www.ariaprivateclients.com

Address:

Nu Bis Centre, Mosta Road, Lija, LJA 9012, Malta.

equilibrium - aria private clients

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