Schroder Life Flexible Retirement Fund
The DC savings journey
Members in a defined contribution (DC) pension are on a journey. Well managed, this journey takes them towards a pot of money to meet their needs in retirement.
In the early stages of the investment journey the pension scheme can take on carefully calculated risk to encourage growth.
By the time members reach the last stage of their savings journey, they are probably looking forward to retirement. But from around their mid-50s onwards, a major loss of savings could be disastrous.
There is unlikely to be enough time to replenish their pot through additional savings or investment returns unless they delay retirement, which is unlikely to be welcomed even if it is possible. The saver's need to minimise risk is therefore paramount.
Source: Schroders. For illustrative purposes only.
Introducing the Fund
The Schroder Life Flexible Retirement Fund has been based on an investment approach that acknowledges the risk and return profile savers need changes as they get older.
The aim is to protect savings from losses whilst offering real returns in excess of inflation in order to provide savers with firm foundations, before and during retirement.
The Fund has an ongoing charge of 0.3%, well within the Government's charge cap.
A level of growth that offers real returns in excess of inflation to combat the effect of inflation on future purchasing power.
2. Reduced risk
A unique risk management process that seeks to limit losses to 8% of the value of the fund over any holding period.
*The return and maximum loss targets are investment objectives only and not guaranteed
Keeps all options open to the member, prior to, and during retirement.
Risk management to cushion the member against potential market shocks.
Value for money
A solution that seeks the optimal balance of cost, quality and performance.
A balanced portfolio of assets which aims to generate returns in most market environments.
John McLaughlin introduces the Schroder Life Flexible Retirement investment process.
IN ORDER TO PROVIDE SAVERS A SECURE TRANSITION INTO RETIREMENT, THE FUND USES TWO DISTINCT, BUT COMPLEMENTARY INVESTMENT APPROACHES.
1. Multi-Asset portfolio to provide growth
At its core the fund is built around an actively managed portfolio targeting a real return of 2%*.
Growth, when economies are growing
Defensive, when economies are shrinking
Inflation, when prices are rising faster than expected
2. Risk management to limit loss
To provide added safety, the fund seeks to limit the maximum loss (if any) an investor may experience to 8%*.
As markets become uncertain the level of security
is increased by moving investments from
the core portfolio into cash.
As markets stabilise, the cash can be
gradually invested back into the core portfolio
*The return and maximum loss targets are investment objectives only and not guaranteed.