Staying the course

This is a marketing communication for institutional investors only. 

With markets still volatile, is your scheme resilient enough to withstand future market shocks?

The need for DB schemes to build diverse investment portfolios was all too obvious in 2022. But so, too, was the need to make tactical calls in response to unprecedented market volatility.

In this paper, we explore how SEI's Investment Management Unit (IMU) approaches macroeconomic uncertainty. We argue that whilst being globally diversified helped mitigate the impact of the liability-driven investment (LDI) crisis on client portfolios, 2022 also demonstrated the limitations of diversification.

With market volatility still very much a concern, we believe active management is a key consideration in managing portfolio risk.

Five market moments: The SEI Dynamic Asset Allocation (DAA) Fund

Hover or tap on the five market moments to understand how the IMU responded to macroeconomic uncertainty over the course of the COVID-19 pandemic:

Source: SEI, Bloomberg. Date range (Dec 19-May 23) chosen to illustrate tactical trades made by the team in response to the COVID-19 pandemic. Past performance does not predict future returns. Cumulative performance is calculated relative to the benchmark (MSCI World), using the institutional share class, and fund’s base currency (GBP), net of fees. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. The SGMF Dynamic Asset Allocation Fund is actively managed and not managed in relation to any benchmark.

Source: SEI, Bloomberg. Annual performance is shown as at 31 December 2022, relative to the benchmark (MSCI World). The institutional share class, and fund’s base currency (GBP) is used, with returns calculated net of fees. Past performance does not predict future returns. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. The SGMF Dynamic Asset Allocation Fund is actively managed and not managed in relation to any benchmark.

This is a Marketing Communication. This webpage contains marketing material about our fiduciary management service. This webpage does not represent impartial advice on this service. In certain cases, you are required to conduct a competitive tender process prior to appointing a fiduciary manager. Guidance on running a tender process is available from the Pensions Regulator.

This webpage is provided by SEI Investments (Europe) Ltd ("SIEL"). SIEL is authorised and regulated by the Financial Conduct Authority. Financial Services Register Firm Reference Number (FRN) 191713. Registered office; 1st Floor, Alphabeta, 14-18 Finsbury Square, London EC2A 1BR. Registered in England and Wales – company number 03765319. This webpage is intended for Institutional Investors only and should not be distributed further. While considerable care has been taken to ensure the information contained within this paper is accurate and up-to date and complies with relevant legislation and regulations, no warranty is given and no representation is made, as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. The views and opinions in this webpage are of SEI only and are subject to change. They should not be construed as investment advice. Sustainability guidelines may cause a manager to make or avoid certain investment decisions when it may be disadvantageous to do so. This means that these investments may underperform other similar investments that do not consider sustainability guidelines when making investment decisions. There can be no assurance goals will be met. If a product or strategy is subject to certain sustainable investment criteria it may avoid purchasing certain securities when it is otherwise economically advantageous to purchase those securities, or may sell certain securities when it is otherwise economically advantageous to hold those securities. Sustainability is not uniformly defined and scores and ratings may vary across providers.

Additionally, this investment may not be suitable for everyone. If you should have any doubt whether it is suitable for you, you should obtain expert advice. Please refer to our latest Prospectus (which includes information in relation to the use of derivatives and the risks associated with the use of derivative instruments), Key Investor Information Document, Summary of UCITS Shareholder rights (which includes a summary of the rights that shareholders of our funds have) and the latest Annual or Semi-Annual Reports for more information on our funds, which can be located at Fund Documents (https://seic.com/en-gb/fund-documents). And you should read the terms and conditions contained in the Prospectus (including the risk factors) before making any investment decision. The UCITS may be de-registered for sale in an EEA jurisdiction in accordance with the provisions of the UCITS Directive.

The portfolio allocation may include exposure to Irish Common Contractual Funds (“Irish CCFs”)  which are authorised by the Central Bank of Ireland pursuant to the Investment Funds, Companies and Miscellaneous Provisions Act 2005 and the European Union (Alternative Investment Funds Managers) Regulations (as amended) (the “AIFM Regulations”). The Irish CCFs are managed by SEI Investments Global, Limited an Irish private limited liability company which is authorized by the CBI pursuant to the AIFM Regulations. The Irish CCFs are subject to the Central Bank of Ireland’s regulatory regime for alternative investment funds contained in the AIF Rulebook and qualify as qualifying investors scheme for the purpose of the AIF Rulebook. As such, the Irish CCFs may be marketed solely to Qualifying Investors. SEI Investments (Europe) Ltd acts as the distributor of the Irish CCFs. 
 
The portfolio allocation may include exposure to non-EEA Alternative Investment Funds managed by SEI Investments Management Corporation (“SIMC”) which may not be subject to the AIFM Regulations or equivalent legislation or regulatory oversight in those particular jurisdictions.
 
SEI Alternative Investment Funds may be non-standardised and bespoke, and may invest in a variety of underlying assets such as shares in unregulated collective investment schemes which do not provide a level of investor protection equivalent to collective investment schemes, debt securities including collateralized loan instruments, asset backed securities and other forms of structured credit, property, commodities or fund-of funds mutual funds. Alternative Investment Funds by their nature involve a substantial degree of risk, including limited liquidity, lack of regulatory oversight, tax risks, investment risks, risks inherent to investments in highly volatile markets, risks related to international investment, risks pertaining to various investment techniques that may be employed by the fund, risks related to the ability to diversify investments, risks related to the accuracy of valuations of investments, and conflicts of interest and the risk of complete loss of capital and are only appropriate for parties who can bear that high degree of risk and the highly illiquid nature of an investment. 
 
SEI Alternative Investment Funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. It should be noted that they may not be required to provide periodic pricing or valuation information to investors and may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as SEI’s range of UCITS or the Irish CCFs, and may often charge higher fees and offer limited liquidity.