A combination of active and passive investment management
CI LifeCycle Portfolios make use of active investment management, complemented by passive strategies through exchange-traded funds. This combination offers potential for alpha generation from active management and, through ETFs, exposure to non-core asset classes, which we believe creates more efficient portfolios. The ETFs provide exposure to long-term bonds, real return bonds, emerging markets bonds and real estate investments. As a result, our portfolios are amongst the most well-diversified target date funds in the market today.
Currency management strategy
CI Multi-Asset Management’s proprietary currency management glidepath increases exposure to the Canadian dollar as the retirement date approaches. This reduces the impact of currency as plan members age.
The currency program is implemented through the mix of underlying active and passive funds, which are a combination of actively hedged, fully hedged and non-hedged mandates. For example, the U.S. and international equity exchange-traded funds are fully hedged. The fund weightings are adjusted to provide more currency hedging as the portfolio becomes more conservative over time. Conversely, the currency hedge ratio is generally lower, and the degree of active currency management greater, when the portfolio has a longer time horizon.