While there are many facets to the governance process of FutureWise, we felt it was important to update on FutureWise’s annual review process where we consider four core phases of FutureWise’s investment glidepath design.

As a result of this review, FutureWise has updated its strategic asset allocation in September 2025:

• Private assets are formally being introduced into the growth portfolio.
• The retirement (landing) portfolio will reduce risk profile by approximately 15%. Reducing target volatility from 7.35% to 6.20%.
  • This is through a 15% allocation to global government bonds, reducing exposure to global high yield and emerging market debt.
• A dynamic derisking review concluded that the 2035 vintage will start derisking 10 years from retirement.
• An increase in tactical asset allocation flexibility from 5% to 10% for derisking vintages, in line with current retirement vintage flexibility, better preparing the portfolio to deal with ever-changing market conditions and the need for greater diversification. 

Growth has been slowing and with increased change, markets have become more turbulent. Key drivers of this volatility have been:

• Increased geopolitical tension.
• An end to US exceptionalism - exacerbated by trade policy.
• Stagflation economic conditions forcing central banks' monetary policy to walk a tightrope between labour markets and inflation.

As US trade policy seeks to rewire global trade, we are seeing increased inflation and reduced growth percolate through the global economy. Additionally, central banks have an increasingly uncertain outlook as they look to stimulate just enough growth to avoid recession as inflationary presurres continue.

As with any sophisticated and flexible strategy, FutureWise has been assessing these risks and is making some strategic changes in the interest of member outcomes at retirement.

Long term capital market assumptions still argue strongly for members taking risk while a significant investment horizon exists, so we continue to be risk-on for our younger members where we continue our integration of private assets. Additionally, we keep our equity exposure under review to increased currency risks from the US dollar as the Federal Reserve comes under increased pressure from President Trump to keep interest rates low and allow inflation to run.

For members with a shorter investment horizon, we are mindful that markets are becoming more turbulent. This raises the need for greater flexibility in tactical asset allocation and a reduction in risk across our bond portfolios, rather than a reduction in equity risk.

Our reduction in retirement risk has been focused across our bond portfolios as we acknowledge the reduced liquidity and sharper risk adjusted drawdowns within high yield markets in times of market stress when compared with global equities.

In order to address shorter term market risks, we have been gradually increasing allocations to minimum volatility equities, gold and shorter duration bonds to the FutureWise derisking vintages to build greater resilience to the portfolio on approach to retirement. While these asset classes are not included within the strategic framework, they reflect the rigorous investment process, broad research capability and FutureWise’s commitment to diversification and improved member outcomes.

If you have any questions, please do reach out to your Relationship Director or your usual Fidelity contact. We look forward to providing further regular updates.