About LV’s Smoothed Managed Funds
LV’s Smoothed Managed Funds are a range of multi-asset, risk-rated funds designed to grow investors’ money while providing them with a composed, low volatility investor experience.
The funds provide an investment journey with a smoother return profile than is generally available from many multi-asset investment funds by smoothing out the daily stock market movements. This is attractive to cautious investors who are uncomfortable with the ups and downs of stock market investment and more concerned about possible losses than probable gains.
The funds invest in a diversified portfolio of fixed interest securities, equities, property, and cash. They use a smoothing mechanism that takes the average of a fund’s daily underlying price over the previous 26 weeks to produce a ‘smoothed’ fund price. This process aims to reduce the stress and worry of stock market investing, and avoid sudden shocks and cliff-edge falls in investment performance.
LV=’s Smoothed Managed Fund range is designed to provide steady long-term growth over a period of at least five years. LV=’s smoothing process does not mean investments will not drop in value. Smoothing will not prevent losses in longer-term falling markets and investments may go down as well as up. The smoothing process has continued to perform as intended through the extreme volatility seen as a result of Covid-19. However, in exceptional market conditions (when the underlying price is 80% of the averaged or ‘smoothed’ price) the fund will be valued on the underlying price. We also reserve the right to do this at other times.
Since the launch of the fund series in 2006, the smoothing process has withstood market volatility and has not ‘snapped’ down to the underlying price. The maximum daily negative market movement on a fully smoothed investment in the SMF fund range is 0.20%.