Norwich Union has changed the asset mix of its Balanced Distribution Fund. It has increased the fund’s exposure to property and reduced the proportion invested in bonds.
Norwich Union has changed the asset mix of its Balanced Distribution Fund. It has increased the fund’s exposure to property and reduced the proportion invested in bonds.
The change is designed to increase the income generated by the fund without increasing levels of risk.
The new asset mix of the Norwich Union Balanced Distribution Fund is:
| UK equity income | UK corporate bonds | Property | |
|---|---|---|---|
| New asset mix | 40% | 32% | 28% |
| Previous asset mix | 40% | 40% | 20% |
Neil Davies, head of investment product development, said: "We are increasing the proportion of the fund invested in property following an asset allocation review. We believe the prospects for the sector remain bright. Our view is that a well diversified distribution fund should currently have about a third of its assets in commercial property.
"The Norwich Union Balanced Distribution Fund holds a higher proportion of property than many other distribution funds in the market – a typical distribution fund holds about 6% property - and our view is that this may enable it to produce better returns without increasing risk.
"The Norwich Union Balanced Distribution Fund will appeal to investors who want a rising level of income and who can see the benefits of investing in a range of assets to reduce risk. Investing in a mix of equities, bonds and property makes sense because they react differently to different economic conditions."
He added: "As we have seen, investing only in shares can be a real roller-coaster ride but investing in a more diversified range of assets is more likely to provide steadier returns than another fund that concentrates on a particular investment."
The value of a fund and the income from it may go down as well as up, and the investor may not get back the original amount invested.
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Louise Soulsby 01904 452617 Out of hours 07810 057262
About the Norwich Union Balanced Distribution (life) fund
The Balanced Distribution Fund was launched in July 2003 and is available through Portfolio, which is Norwich Union’s investment bond. The aim of the fund is to provide a good level of rising income with the potential for capital growth. To achieve this, it invests in a mix of UK equities, UK corporate bonds and property. It will appeal to investors who want a diversified portfolio to spread risk, generate income and offer the potential of capital growth.
The Balanced Distribution Fund offers:
- Potential for capital growth in addition to a regular income
- Choice of income options – distribution option, regular withdrawals and adding the income to your bond for growth
- Flexible income payment – monthly, quarterly, four-monthly, half-yearly or yearly.
The views and opinions expressed are those of Norwich Union, they are not a forecast of future returns or a recommendation to buy and sell investments.
Performance figures (7 July 2003 - 7 July 2004)
| Funds | % Growth | Rank | Quartile |
|---|---|---|---|
| Norwich Union Balanced Distribution (life) | 7.39 | 15 | 2 |
| ABI UK Life fund - Distribution Life | 4.33 | 35 | 3 |
Past performance is not a guide to future returns.
About Norwich Union
Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company's long-term savings business in the UK. Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group. Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.