For customers Guaranteed solutions Your investment choice

Transcription

1 For customers Guaranteed solutions Your investment choice

2 The investment choice available within our Aegon Secure products allows you to choose from a range of funds. You can find more detail about them on the following pages. Before you choose where to invest your money, it s important you discuss this with your financial adviser. They ll help you make sure your investment choice meets your needs and matches your attitude to risk.

3 Managing risk or asset mix? When choosing an investment it s important to select a strategy that meets your objectives, balancing your desired level of return with the level of risk you re willing to take. There are various ways of measuring and managing the risk of an investment. Volatility, for example, is a measure of how much the returns of an asset or portfolio fluctuate over time. The portfolios available within our Aegon Secure products focus on either targeting a certain level of risk or maintaining a targeted asset mix over time the table below gives further information. Strategy Targets What is flexible? Managing risk Risk level Asset mix Managing asset mix Asset mix Risk level An investment strategy can be focussed on: n Managing risk: to provide smoother returns in both market directions (upside and downside) and a more consistent performance. This strategy should minimise the impact of sharp market fluctuations by targeting the portfolio to a specific level of volatility. n Managing asset mix: to capture market upside through a targeted equity/fixed interest allocation. This strategy is more likely to experience greater variation of returns during market fluctuations. Investment returns aren t guaranteed and the fund value could fall as well as rise. You may get back less than your original premium. 03

4 Our Managed Risk Portfolios Our Managed Risk Portfolios aim to target a level of volatility through investment in a mix of UK fixed interest, UK equities and cash. The portfolios apply an investment approach that looks to control the level of volatility by reviewing and, if necessary, adjusting the mix of investments daily. Aegon has appointed BlackRock as the fund manager of these portfolios. BlackRock has discretion to adjust the portfolios mix of investments, with the aim of controlling and maintaining volatility at or close to the target level. For example, when market conditions are more unstable the proportion of less risky assets may be increased (de-risking). Likewise, if market conditions stabilise the amount of higher risk assets may increase (re-risking). The diagram below can help you visualise this. It s for illustrative purposes only and the mix of investments may differ. Fixed interest Equities Market volatility rises De-risking Re-risking Market volatility falls Fixed interest Equities We offer three portfolios to allow for different risk appetites. Each option has a different target volatility level. You can choose from a Defensive, Cautious or Balanced risk approach. Please note that the names Defensive, Cautious and Balanced are meant to identify the three volatility levels and aren t linked to the historic ABI sector classifications. The average expected equity exposure for the portfolios is based on testing an investment strategy using historic data over the last 10 years and is given below: Managed Risk Portfolios Target volatility level Defensive 5% 30-35% Cautious 7% 45-50% Balanced 9% 60-65% Average expected equity exposure The portfolios aren t limited to a pre-defined investment mix. The portfolio can change significantly over time as the portfolios may invest entirely in equities, fixed interest or cash if appropriate. Managed Risk Portfolio Balanced This portfolio isn t available if you ve selected any of the following products and options: n Aegon Secure Capital with a guaranteed term of 10 or 11 years n Aegon Secure Trustee Investment with guaranteed capital and a guaranteed term of 10 or 11 years 04

5 Our Core Portfolios Our Core Portfolios may be suitable for you if you value target levels of equity and fixed interest exposure within a fund. Historically fixed interest and equities have a low correlation to each other so as the performance of one goes up or down, the performance of the other won t necessarily move in the same direction, or to the same extent. The Core Portfolios target fixed allocations in both of these asset classes. There s no automatic process in place to change investments in the fund to limit exposure to changes in the fund price. We offer three Core Portfolios that give you the opportunity to invest in a mix of the UK Fixed Interest fund managed by Kames Capital and UK Index Tracker fund managed by BlackRock. 60/40 Core Portfolio This portfolio isn t available if you ve selected any of the following products and options: n Aegon Secure Capital with a guaranteed term of 10 or 11 years n Aegon Secure Trustee Investment with guaranteed capital and a guaranteed term of 10 or 11 years The UK Fixed Interest fund The fund aims to provide long-term capital growth by investing in a diversified blend of mainly high quality corporate bonds and government bonds although it may also invest in high yield bonds, overseas bonds and cash. The UK Index Tracker fund The fund aims to achieve capital growth for investors by closely tracking the performance of the FTSE All Share Index by investing in companies in the index. Asset allocations Our three Core Portfolios have target asset mixes as shown below. 80/20 Core Portfolio 70/30 Core Portfolio 60/40 Core Portfolio Fixed interest Equities Our UK Cash fund You can also invest in our UK Cash fund which is managed by Kames Capital. Cash is a lower-risk investment than other assets such as equities and fixed interest and therefore has lower expected returns. Our UK Fixed Interest fund If you take out our Aegon Secure Trustee Investment plan, you can also invest in our UK Fixed Interest fund managed by Kames Capital. The fund aims to provide long-term capital growth by investing in a diversified blend of mainly high quality UK corporate bonds and UK government bonds although it may also in invest in high yield bonds, overseas bonds and cash. 05

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7 Annual management charge Fund AMC Managed Risk Portfolios 0.2% Core Portfolios 0.1% UK Cash fund 0.1% UK Fixed Interest fund (Aegon Secure Trustee Investment only) 0.1% Rebalancing the portfolios Managed Risk Portfolios BlackRock will review the asset mix on a daily basis and when necessary adjust it to maintain the level of volatility to the specific target. Our investment providers Core Portfolios We ll regularly rebalance the mix between the UK Fixed Interest fund and the UK Index Tracker fund within these portfolios to make sure the amounts remain in line with the target allocations and allowable limits. We reserve the right to rebalance at any time. BlackRock is a worldwide leader in investment management for both institutional and retail clients. It also offers cuttingedge risk management and advisory services to institutional clients. To meet clients needs, BlackRock offers active, enhanced and index strategies across markets, asset classes and risk categories. Products include investment funds, ishares (exchange traded products), and other pooled investment vehicles. For more information on BlackRock, you can visit their website at Important notes We re unable to give you advice. Your financial adviser will be able to discuss each option that s available to you and help you make the right choice for you from the options we show in this leaflet. Kames Capital is a forward-thinking and innovative investment management company that s part of the Aegon group. Its capabilities range from fixed income and equities to property and multi-asset investing. For more information on Kames Capital, you can visit their website at This is only a short summary of the funds available to you. Please see the specific fund factsheet for further information about them. There s no guarantee that the Managed Risk Portfolios will achieve their objective of managing volatility at or around the selected target. 07

8 If you d like further information about our investment choice or Aegon Secure product range, please speak to your financial adviser. As Lead Partner of British Tennis, Aegon is helping to transform the future of the sport by supporting young talent, national teams and events throughout the country, including the Aegon Championships at The Queen s Club. Find out more at aegontennis.co.uk Aegon is a brand name of Aegon Ireland plc. Aegon Ireland plc, registered office: 2nd Floor, IFSC House, Custom House Quay, Dublin 1, Ireland. Registered in Ireland (No ). Authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. An Aegon company Aegon Ireland plc C DUB /15