Copia launches portfolios purpose-built for decumulation using iShares

  • Author : Copia Capital Management
  • Date : 24 Mar 2017
  • Copia Capital Management today unveils its Retirement Income range of managed portfolios, purpose-built for decumulation and built by Copia using iShares® exchange traded funds (ETFs)
  • For this range, Copia has set five risk profiles and four time horizon ranges to help Advisers match portfolios to Client needs
  • Copia has also published and developed a table of ‘Safe Withdrawal Rates’ that match each asset allocation and investment term, which relates to life expectancy

Novia Financial’s discretionary fund management division, Copia Capital Management, has today launched its range of managed portfolios purpose-built for decumulation. Designed to assist Advisers looking for a Centralised Retirement Proposition, they consider the three key variables for retirement planning – risk level, withdrawal rate and time horizon. Time horizon is primarily a function of life expectancy so Advisers will be able to check a ‘Safe Withdrawal Rate’ for each of the portfolios.

The Retirement Income portfolios are designed to mitigate what is considered to be the key retirement risk – “shortfall risk” (the risk of running out of money), and four of its drivers:

Sequencing Risk: Risk and return expectations vary depending upon different time horizons. So sequencing risk can be mitigated by ensuring the asset allocation is appropriate for the time horizon

Longevity Risk: By applying a matching ‘Safe Withdrawal Rate’ for a given time horizon based on National Life Tables, Advisers can receive further statistical confidence that the retirement pot will last the course

Interest Rate Risk: Each portfolio targets a specific duration (interest rate sensitivity) that relates to the investment term

Inflation Risk: Portfolios are constructed by Copia using iShares® ETFs

Copia is using strategic asset allocations for each risk profile from EValue which has an established track record in developing actuarially robust asset allocations using its stochastic modelling engine. Copia then uses the reading from its quant-driven Risk Barometer to make tactical allocation adjustments to protect the portfolios from shortterm market risk on the downside.

While Copia’s portfolios are only available through the Novia platform, they have the facility to launch and run on any other platforms that provide access to ETFs. The launch of the new Retirement Income range allows Copia to now offer Advisers a full range of portfolios for each stage of the investment lifecycle.

Henry Cobbe, Head of Copia Capital Management said:
“Decumulation is very different from accumulation. It has different objectives, different risks and requires a different investment approach. We don’t think it’s right to recycle old thinking into this new world. Only Advisers know their Clients’ retirement income needs and circumstances. Our Retirement Income range is purpose-built to give Advisers a compliant investment solution that matches a ‘Safe Withdrawal Rate’, risk level and time horizon for each Client. It’s Retirement Risk Profiling as it should be.”

Pollyanna Harper, Head of iShares® Retail UK Sales at BlackRock said:
“Whether the aim is to provide equity income or manage bond duration, using ETFs to build portfolios equips investors with targeted tools for achieving exposures that match their outlook and help pursue their goals. This is an exciting solution for the Adviser community.”

Andrew Storey, Sales Director at EValue said:
“Investing in retirement is like investing upside-down. You are not putting money in, you are taking money out. And taking too much out too early creates a big problem. So managing the key retirement risks is essential.”

Abraham Okusanya, Head of Research, FinalytiQ said:
“Those that attended FinalytiQ’s Science of Retirement conference this year or read our white papers will be familiar with the concepts of pound cost ravaging, sequencing risk and sustainable withdrawal rates. These are key considerations when advising Clients in retirement. It’s good to see providers are now addressing them.”


Notes to Editors:
Novia Financial plc launched to market in October 2008 to provide a comprehensive wealth management service or ‘full wrap platform’ for investment Advisers and their clients and now has approximately £7bn worth of assets under administration. Novia provides a transparent pricing structure as well as access to a wide range of product wrappers, an all-encompassing suite of portfolio management tools, and access to an extensive range of investments including direct equities, traditional authorised funds both onshore and offshore, exchange traded products such as ETFs and ETCs, as well as Cash Deposits, Structured Products and an integral Cash Facility.

The core operating system is provided by Australian-based GBST that has been developing software solutions for fund administration and financial services since 1996, and for wrap solutions since 1999. GBST include more than 60 of the world’s leading banks, stockbrokers and fund managers on its systems. In 2016, it reported a revenue of AU$108.1 million and an EBITDA of AU$17.2million. The comprehensive suite of portfolio management tools is powered by Financial Express that also provides the data for the platform.

The Novia team, based in Bath, is led by Bill Vasilieff – joint cofounder of Selestia. Novia, as an independent proposition, has substantial financial backing from a combination of private individuals and corporate organisations. The board is chaired by Sir Anthony Cleaver (former Chairman and Chief Executive of IBM in the UK). Other members include John Beaumont, non-executive, who has held a number of non-executive roles in major public organisations and several technology startups, David Royds (non executive and investor), Bill Vasilieff, Novia’s CEO, and Paul Parry, Novia’s CFO. Novia Financial plc is authorised and regulated by the Financial Conduct Authority (Reg. No. 481600).

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