Smooth Managed Fund launched

The new fund launch follows an increase in demand for investment funds that offer some protection against market volatility.

The Smooth Managed Fund is designed to deliver growth over the medium to long term, employing a ‘smoothing’ process to shelter clients from some of the impact of adverse market movements. The fund invests in a broad range of global assets which can change over time, aiming to keep the investment risk in line with a moderately cautious risk profile.

The new fund is suitable for advisers who have clients moving into Income Drawdown where smoothing can help manage the risks associated with taking an income in a volatile market.  Clients approaching retirement may also prefer to see a smoother return in the final few years leading up to their retirement date. 

Tim Orton, CEO Aviva Adviser Platform, says;  “In our last Adviser Barometer research, economic uncertainty post-Brexit was one of the biggest concerns for advisers with 78% saying they were most worried about market volatility as the UK goes through the process of leaving the European Union - twice as many as 12 months ago. At the same time, interest rates available on cash deposits remain at historically low levels.

"We’re launching the Smooth Managed Fund today in response to adviser and customer demands for investments that have scope to deliver better than cash returns but with fewer of the ups and downs that are usually associated with more traditional investments. 

"The Smooth Managed Fund has a moderately cautious risk profile but uses an innovative smoothing technique to reduce the day-to-day changes in price in order to provide more stable returns over the medium to long term.  Pensions Freedoms continues to see people taking more control over their later life finances and this fund is targeted at clients who want to remain invested leading up to and in retirement but see a steadier return on their investment. ”

The Smooth managed Fund can go down as well as up in value and returns  are not guaranteed. 

Fund details

Availability: An insured fund available in the core funds range through Pension Portfolio on the Aviva Adviser Platform. The fund is not available to invest in directly without an adviser.

Price: A fund management charge of 0.65% p.a.

Investments: Invests in a wide range of global assets including UK and International Equities, bonds, target return funds, property, emerging market debt and cash.

Smooth Growth Rate: The smoothed price of the Fund will usually increase daily in line with a Smooth Growth Rate which is equal to the Bank of England Base Rate plus 5% per year (capped at 10% and subject to a minimum of 5% per year). 

Fund Price Adjustments:  The smoothed price of the Fund is compared to the unsmoothed price on a daily basis.  If the difference between the two prices is 6.5% or more, the smoothed price is adjusted so that the difference is reduced to 1.5%.

Research carried out in November 2016 with a total of 631 advisers and paraplanners.

Media

Catherine Comben +44 (0)1904 453394 :   +44 (0)7800 692087

catherine.comben@aviva.com

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