Only 31% of UK adults have moved (or are currently considering moving) some of their savings to a higher risk investment in order to achieve more growth, while 63% of consumers say they are too worried about volatility to consider moving their savings.
A smoothed solution?
As an industry, we need to ensure consumers have access to low volatility products that potentially give returns higher than cash savings, but also offer the peace of mind that many consumers clearly need.
For savers who are worried about volatility, one solution could be smoothed funds. These are designed to reduce the volatility felt by consumers, but still produce real returns over the long term.
LV= has recently launched two new smoothed funds, Extra Cautious and Impact Growth. The Extra Cautious fund may be well suited to a client who is looking to combat the impact of inflation on their cash savings without introducing much more volatility.
The Impact Growth fund is a medium risk fund designed with ESG credentials. Benefitting from the same smoothing mechanism as our existing funds (which boast over 15 years of stable performance) this fund invests in sustainable equities, providing a potential solution for your clients who, whilst they accept they may have to move further up the risk scale to achieve their required capital or income needs, would feel much more comfortable in that journey were they supported by a smoothed multi-asset solution.
To find out more, visit lvadviser.com/smoothed-investments
Please remember this is a stock market related investment, which can rise and fall in value, your client may get back less then they invested.
In exceptional market conditions (when the underlying price is 80% or less of the averaged or ‘smoothed’ price) the fund will typically be valued on the underlying price. Or, using our discretion, may be valued on the daily gradual averaged price with a shorter smoothing duration. We reserve the right to move to the underlying or gradual averaged prices at other times.
*Mass affluent is defined by LV= as consumers with £100,000 to £500,000 assets excluding property.
Source: LV= Wealth and Wellbeing Monitor, May 2022 edition