Aegon bolsters Retiready with Stability fund launch

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Aegon UK has launched Retiready Stability, a new fund for pension customers on its popular Retiready digital service, bolstering the range of investments available to the platform’s 75,000 digital pensions customers.

The Retiready Stability fund, which slots into risk level 1, means pension investors now have a choice of five funds, one for every risk level. The fund is very low risk and designed for investors seeking to preserve their pension savings, typically before taking retirement income, and still receive bank deposit beating returns over the medium term.

60% of UK investors say they don’t want to take risk with their money. With cash investments offering poor returns, there’s a good chance that these investors could lose money in real terms over time. While the Stability fund isn’t a substitute for cash we believe it strikes an appropriate balance between minimising risk and offering potential for beating cash returns.

The financial crisis, and the low interest rate environment that followed, have significantly changed people’s appetite for risk. New research from Aegon suggests that one in three (32%) people over 55 are now more risk averse as a result of the crash, and are approaching investment with this in mind. Despite record low interest rates, growth ambitions in this age group are also conservative. 40% are investing in products that simply keep pace with or slightly beat inflation.

During the worst of the credit crunch, equity markets fell by up to 30%, an experience which left many savers cautious about investing. As Retiready’s very low risk option, Stability’s design means it’s unlikely to fall by more than 5% in the event of a sudden market fall. It mitigates risk through broad diversification across four absolute return funds, investing in a mix of UK and overseas equities, bonds, commodities and alternative investments.

Nick Dixon, Investment Director at Aegon said:

“Many pension savers approaching retirement do not want to lose money.  Retiready’s Stability fund is designed to minimise market losses while retaining potential for growth above inflation.

“We also know that too much choice can be paralysing, which is why we’ve developed a straightforward risk assessment tool to help people understand how much risk they are willing to take and five easy options to choose from.”

The fund is equally invested across four carefully selected funds:  Fulcrum Diversified Core Absolute Return; Jupiter Strategic Reserve; Kames UK Equity Absolute Return; and Newton Global Dynamic Bond. The fund TER is 0.87%.

There’s no guarantee that the fund’s objectives will be met. The value of this investment may go down as well as up and investors may get back less than originally invested.