Applying Asset Allocation

What is asset allocation?

With asset allocation your assets are divided among broad categories of investments. You decide how much to allocate into each investment category, also called asset class, based on your risk tolerance and your financial goals. Instead of chasing the performance of a particular investment, you make systematic, deliberate investments in a variety of asset classes. You can also make adjustments through a process called rebalancing to keep your portfolio in sync with your asset allocation strategy.

How is risk tolerance involved?

There is a direct relationship between potential returns and risk. The higher the potential return, the higher the degree of risk, including the possibility of loss of principal. Before deciding on a personal investment strategy, you must consider how much or how little risk you are prepared to take with your money.

How 'hands-on' are you?

In addition to considering your tolerance for risk, your investment strategy should account for how much you wish to personally manage your portfolio on a continuing basis. There are two methods for asset allocation – hands-off and hands-on – and both have the same goal — to manage your investment portfolio and help you reach your retirement goals.

Two approaches to asset allocation


Hands-off

There are two types of funds associated with a "hands-off" approach.

  • Lifecycle funds:  Based on an investment time horizon, these types of funds are designed to help you move through the stages of your life without having to adjust your investment options as your risk tolerance changes. Lifecycle investment options utilize the investment expertise and continual oversight of the fund manager to keep your asset allocation on track.
  • Asset allocation funds:  These types of funds are designed to help you invest and are based on your specific risk tolerance. The risk tolerance associated with each fund does not adjust throughout the stages of your life.  Asset allocation investment options utilize the investment expertise and continual oversight of the fund manager.  Your risk tolerance may change, and asset allocation investment options need to be revisited periodically to make sure they match your current risk tolerance.

Hands-on

You can decide how much to allocate into each investment category based on your risk tolerance and your financial goals. You then need to be sure to regularly revisit and possibly adjust your asset allocation over time. Horace Mann Life Insurance Company (Horace Mann) has tools such as questionnaires and software to help you keep your asset allocation on track.

What approach best fits your investment style?

If you prefer to be hands-on in managing your Horace Mann variable annuity, completing our asset allocation worksheet can help you determine your risk tolerance.

If you prefer to be more hands-off, then a Horace Mann insurance agent can tell you more about our lifecycle and asset allocation investment options.

Asset allocation and rebalancing do not ensure a profit or guarantee against a loss in a declining market.

Horace Mann Life Insurance Company underwrites Horace Mann annuity products. Horace Mann’s variable annuities are distributed by Horace Mann Investors, Inc., member FINRA . Horace Mann Investors, Inc. is located at #1 Horace Mann Plaza, Springfield, IL 62715.

You can receive variable annuity prospectuses from your Horace Mann representative or by calling 800-999-1030. You should read the contract prospectus and the underlying investment option prospectuses carefully and consider the investment objectives, risks and charges and expenses carefully before you invest or send money. The prospectuses will provide complete information about Horace Mann's variable annuity contracts, Horace Mann Life Insurance Company and the underlying investment options. As with all securities, variable annuities involve a risk of loss, including a loss of principal. 

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