Schroder Life Diversified Growth Fund

In the early part of the journey, most savers can – and should – take on some investment risk to generate the growth they need to boost their savings. This fund is aimed at early savers, so it tends to emphasise growth.

What it tries to do

Provide healthy returns...

The fund aims to grow by an average of at least 5% a year more than inflation (the retail prices index) over the period of a “market cycle”. (A market cycle is the time it takes the stock market to go through both a “down” and an “up” period, typically five years.)


while smoothing the journey

The fund aims to make the path to its target less bumpy by reducing short-term fluctuations in its value.


How it works

Most of the fund is invested in shares in companies from around the world…

…but so as not to be overly dependent on one source of growth, it also invests in a range of other assets.

This mix will be adjusted by Schroders’ managers to try to get the best balance between finding long-term returns and avoiding short-term bumps. All the growth comes from the capital value of the fund; it does not pay an income.



Who it is meant for

Younger members who are at the beginning of their career or those with other savings who can accept a higher risk.

Younger savers are likely to need to build small savings quickly, so a higher growth rate is important. They are also better placed to accept higher risks as they have a relatively long time to make up losses through contributions and market growth. The fund may also be suitable for members with substantial savings who can commit a part of them to investments offering faster growth.

We believe the Schroder Life Diversified Growth Fund offers both types of saver the growth they need, without taking undue risks. Even so, some risks remain, as a large part of the fund is invested in shares, commodities (like gold and oil) and other investments that can fluctuate widely over short periods. These risks are mitigated to some extent by the investment in bonds, which are a way to lend money and therefore tend not to rise and fall so much, and by our managers’ ability to change the investment mix according to market conditions.

Risk considerations

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount they originally invested.

The fund may invest in smaller companies, which may be harder to buy and sell than larger companies and their price swings may therefore be greater. Exchange rate changes can cause the value of overseas investments to rise or fall. Less developed markets are also generally less well regulated than those in the UK, while investments there may be harder to buy and sell and may have less reliable custody arrangements for holding shares or bonds. Investments in emerging markets involve a high degree of risk and should be seen as long term in nature.

The fund also invests in higher-yielding bonds (‘non-investment grade’). Here, the risk of the bond issuer not paying interest or repaying the value of the debt is higher than with ‘investment grade’ bonds. As a result, higher yielding bonds may suffer higher losses than lower yielding bonds.

A small proportion of the fund may be invested in unregulated collective investment schemes (which are like unit trusts). They may be closed for subscription and/or repayments to shareholders, may be subject to certain restrictions or limitations, and their shares or unit may be hard to buy and sell.

The fund also invests in ‘derivatives’ (which can include options and futures) and in ‘alternative investments’ (such as hedge funds, property funds and private equity). These can involve high risk and are more likely to suddenly rise and fall in value than an investment in equities or bonds. There is no guarantee that they will meet investors’ expectations.

Further information

Fund launch date: 31 May 2006

Risk rating:

These ratings give an indication of the risk level of the Fund only in relation to the Schroder Pension Management Limited overall fund range and are not relative to all investment funds available in the UK (1 = Low Risk, 5 = High Risk).

For up to date information on performance, fund manager commentary, top 10 holdings and current asset allocation, consult the fund’s latest fact sheet here 


Investments in the Fund can only be made via employers’ Defined Contribution Pension Schemes.

To find out more, please contact your pension scheme administrator.