Changes to the Aegon Mercer Growth fund

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From 1 August 2016, Mercer will make changes to the target asset allocation of the Aegon Mercer Growth fund.

Mercer will reduce the amount invested in UK equities (company shares) from 25% to 15% and increase the amount in overseas equities (hedged back to sterling) from 12.5% to 22.5%. The changes to the target asset allocation are shown in more detail in the table below:

Aegon Mercer Growth fund* Previous % New %
Diversified growth strategies** 50.0 50.0 
UK equities 25.0 15.0 
Overseas equities hedged 12.5 22.5
Overseas equities unhedged 12.5 12.5

Source: Mercer

*Asset allocations may fluctuate by up to 5% above or below the stated target, so figures may vary slightly from time to time. Asset allocations may also fluctuate due to Mercer implementing tactical changes based on medium term investment views.

**Diversified growth strategies include, but aren’t limited to, equities (including emerging market and smaller company equities), global fixed interest and property.

Why the changes are being made

The objective for the Aegon Mercer Growth fund is to achieve medium to high capital growth over the long term. Mercer regularly reviews the Aegon Mercer Growth fund and in order to help it achieve this objective the changes being made to the target asset allocation are to:

  • decrease the exposure to UK equities, which will reduce the reliance on the UK equity market to generate returns.
  • increase the allocation to overseas equities (hedged back to sterling), which will increase the diversification across different regions and make sure the currency exposure to sterling remains the same.

How this change affects the Aegon Mercer Target Retirement fund range

The Aegon Mercer Growth fund is used in the ‘Growth stage’ for our range of ‘Mercer Target Retirement’ funds. As a result, this change will affect the asset allocation in the growth and initial pre-retirement stages of the following funds:

  • Aegon Mercer Target Annuity fund (ARC)
  • Aegon Mercer Target Cash fund (ARC)
  • Aegon Mercer Target Drawdown (ARC)

What do you need to do?

You don’t need to do anything, the changes will happen automatically and will be effective from 1 August 2016.

There will be a marginal increase of 0.01% to the Aegon Mercer Growth fund costs as a result of this change.