The known knowns

City bonuses can vary depending on performance and the same can be said for with-profits bonus rates and fund performance. Strong, well-diversified, actively managed funds do well. Those poorly managed through mis-called asset allocation fare worse

In this context, some with-profits funds have made remarkable progress, minimising the downside during the poor years and re-balancing the asset mix to take advantage of recovering markets. Others though, seem to have made little real progress, despite the prospect of stronger returns. Asset allocation is the key to successful with-profits investing. So, let's consider the assets with-profits or managed funds could invest in, and why that is so fundamentally important to the return achieved. At a simplified level, who would have stayed invested in gilts by choice last year? Surely equitie...