LV= launches smoothed bond for cautious investors
- One in five adults worry that inflation is eroding the value of their savings but nearly two-thirds are too worried about market volatility to consider moving their funds into higher-risk investments
- LV= launches Smoothed Bond that now begins to average daily unit prices from day 2 until fully smoothed over a rolling 26 week period to reduce investment market volatility
- Includes access to 5 choices of risk rated 2-6 funds
Research from pensions and retirement specialist LV= highlights how rising inflation is a growing worry for savers.
The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000 UK adults – reveals:
- Retirees have seen their living costs increase by nearly £2,000 a year
- One in five (21%) of UK adults worry that inflation is eroding the value of their savings but 63% are too worried about investment volatility to consider moving money into higher-risk investments
- And one in ten (11%) would respond to a substantial fall in the market by taking out some or all of their remaining investment.
As consumers’ fears about inflation and market volatility increase, LV= is launching a new Smoothed Bond designed to reduce investment volatility.
The smoothing mechanism for the new Bond has been enhanced to start protecting investors from market volatility from the second day of investment, gradually building until it fully averages daily unit prices over the previous 26 weeks to reduce short-term market fluctuations. And advisers and their clients can now select from a recently extended choice of 5 funds in the Smoothed Managed range; Extra Cautious, Cautious, Balanced, Growth and Impact Growth, which are risk rated as 2,3,4,5 and 6 respectively. It is designed for the majority of UK investors with a low to medium risk profile.
With a new simplified charging structure and fund size discounts the annual management charge (AMC) for new business applications will be discounted from 0.9% to 0.85% until 30th November 2022. The minimum investment is £5,000 and fund size discounts will apply to investments of >£100,000 with up to 0.15% discount for aggregate investments over £0.5M
LV= Smoothed Bond forms part of a suite of LV= Smoothed Managed Funds, which includes LV= Smoothed Pension, LV= Trustee Investment Plan and LV= ISA. The funds are managed by the global asset manager Columbia Threadneedle Investments working in collaboration with the Investment Management Group at LV=.
LV= launches two Smoothed Managed Funds job
LV= added two funds to its Smoothed Managed Funds (SMF) range in May 2022 to appeal to a wider range of investors.
The new funds - Extra Cautious and Impact Growth - are risk-rated 2 and 6 respectively. Both feature LV=’s unique smoothing mechanism.
The new Extra Cautious Smoothed Managed Fund is targeted at low-risk investors who would normally prefer to hold their savings in cash but who are concerned that rising inflation and low returns on deposit accounts are eroding the value of their savings. The key objective is long term steady investment growth with a low level of investment risk. The asset mix of the fund will be about 65% bonds, 20% equities, 10% property, and 5% cash.
The new Impact Growth fund option is designed to deliver long-term steady and sustainable growth with a medium level of investment risk. The proportion invested in equities and property is usually about 70%.