• Global shares: These are typically stocks that represent ownership in companies located around the world
• Global low-volatility shares: These are stocks that represent ownership in companies located around the world, selected based on their history of relatively stable prices in order to potentially reduce overall portfolio risk
• Emerging market low-volatility shares: These are stocks from developing countries that have historically experienced lower price fluctuations than the broader market and are chosen for potential risk reduction in portfolios
• Emerging market shares: These are stocks that ILIM chooses from over 1,400 individual companies which run in 26 different markets in developing or emerging economies. Emerging market shares have the potential for higher returns but are also associated with greater risk due to factors such as political instability or currency fluctuations
• Infrastructure shares: These stocks are from companies involved in providing essential services or physical structures, such as airports, toll roads, railways, ports, water, gas and many others

• Government bonds: These are loans given to various governments which are paid back at an agreed rate of interest over a set period. They’re considered to be relatively low-risk given the established nature of the governments
• Corporate bonds: These are loans given to various companies that are paid back at an agreed rate of interest over a set period. They are considered to be riskier than government bonds due to the creditworthiness of the issuing company
• Emerging market bond: These are loans given to various companies and governments in emerging markets that are paid back at an agreed rate of interest over a set period. They’re typically riskier than bonds issued by more established economies due to factors such as political instability or currency fluctuations
• High yield bonds: These are loans to corporations or governments that agree to pay higher interest rates to compensate for added risk

• Each Irish Life MAPs fund currently has an allocation to ILIM’s Pension Property fund. The portfolio includes around 70 property assets that are leased to over 300 tenants. It also has a broad mix of commercial property. This includes offices, retail spaces and industrial properties.

We start with the pie chart for year one, which shows a fund with 50% in shares, 25% in bonds and 25% in other/external assets.

If, over the course of a year, shares grew in value by 20%, while bonds and other external assets both fell in value by 10%, then, without rebalancing, the second pie chart shows the new split of the fund. Here, 57% of the fund is now invested in shares.

If the same thing happened again, we would end up with nearly two-thirds of the fund invested in shares. This fund mix may no longer be suitable for someone who originally chose an allocation of 50% in shares, 25% in bonds and 25% in cash.