INVESTMENT GOVERNANCE:
KNOW WHAT YOU HAVE
Reviewing your investment mix periodically to
understand what’s in your portfolio is an important
step in personal governance.
Your retirement income program likely
includes one or more of the following: target
date funds, asset allocation funds and/or
balanced funds. When joining a retirement
program, these are often presented as “set it
and forget it” fund options, as they include a
mix of Canadian equity, foreign equity and
bonds. Many people choose these options and
don’t end up looking at their asset mix for
years, however, it’s important to have a basic
understanding of their composition to ensure
you are comfortable with the equity exposure
in your portfolio.
Balanced funds will almost always have an
equal weight of equity and bonds. Asset
allocation funds also have a set mix of equity
and bond investments but the level of equity
for conservative asset allocation funds can be
as low as one quarter of the fund and
aggressive asset allocation funds can be
almost entirely invested in equity.
Understanding the level of equity for each
fund will enable you to determine if the
choices you initially selected are still
appropriate for your retirement objectives.
Target date funds also contain Canadian
equities, foreign equities and bonds, but
unlike balanced and asset