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Smooth Managed Fund Price Change

Jul 31, 2019, 09:17 AM
Pension Portfolio
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Information about our Smooth Managed Fund price change

On the 30/07/2019 the price of the Pension Smooth Managed Fund will be adjusted by +5.4% taking it to just over 108p.

Putting the Fund Price Adjustment into context

Following a challenging 2018, markets have performed exceptionally well so far this year, primarily due to the more dovish stance adopted by the Fed and ECB. This has created a positive environment for equities and bonds alike, which has helped the Smooth Managed Fund’s globally diverse asset allocation to deliver strong positive returns.

Just a reminder - what is a Fund Price Adjustment?

The price of the Smooth Managed Fund increases daily by the Smooth Growth Rate, which is equal to the BoE Base Rate plus 5% per annum.

Each day, the price of the Smooth Managed Fund is compared to the value of the underlying assets i.e. the Unsmoothed price. If the difference between the two prices is greater than 6.5% an adjustment is made to bring the Smooth Managed Fund within 1.5% of the Unsmoothed price.

Therefore, when markets perform poorly the underlying assets may lose value, which can trigger a downward Fund Price Adjustment. Equally, in an environment where markets are performing well we may see an upward Fund Price Adjustment.

This means that over a long-term time horizon, investors will receive similar performance to the underlying holdings. Crucially, however, the client’s investment journey will be much smoother because they are not exposed to daily price movements.

Find out more

For more information about our Smooth Managed Fund, please get in touch with us in your usual way, or visit the Smooth Managed Fund page
IN88029 07/2019

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