Shortly after the launch of its global equity fund in 2020, Equilibrium Investment Management – sister company to Equilibrium Financial Planning – has announced the launch of another new fund.

The defensive fund will target the firm’s clients and prospects with a lower risk tolerance and aims to outperform cash (Bank of England base rate) by 3 per cent per annum over the long term.

Fixed interest makes up the majority of the fund’s asset allocation at 70 per cent, with equities and related securities accounting for less than 25 per cent.

“The defensive fund presents a lower risk than our core funds but is, of course, not without risk. We feel it’s most suitable for those with a lower risk tolerance, or for those with shorter timescales. It may be suitable for a small part of portfolios, especially where large cash balances are held.

It’s been the case for some time now that people are getting a very low return on cash, and it’s recently got demonstrably worse.We hear complaints from clients about their returns on cash frequently, but what we often find is that many of them want to leave a chunk of money in cash as an ‘emergency’ fund. It is our hope that launching the defensive fund will bridge that gap and offer a solution for our clients who are seeking a lower return and less risk.

We also think last year’s hugely volatile markets may have led to  some investors deciding that they’d prefer to take a bit less risk than before as they don’t need to aim for high levels of return.”

(Mike Deverell, partner and investment manager at Equilibrium)

The move comes as Equilibrium recently set out its intention to move to ‘total ESG’ investing alongside the company becoming a signatory of the UN’s Principles for Responsible Investing.

Equilibrium will only invest with fund management groups who can prove, according to the UNPRI framework, that they practice responsible investment. It will also monitor its own portfolios’ carbon emissions to better understand its own contribution to climate change.

This forms part of the firm’s wider commitment to practicing ‘responsible capitalism’, which sees it prioritise employee happiness in order to create shareholder value.

The financial planning company was also recently recognised by the Good Business Charter, which acknowledges businesses that commit to ten core principles: a real living wage; fairer hours and contracts; employee wellbeing; employee representation; diversity and inclusion; environmental responsibility; paying fair tax; committing to customers; ethical sourcing; and prompt payment to suppliers.

Equilibrium was founded in 1995 by Colin Lawson and is headquartered in Cheshire.


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