Investment markets – by their very nature – are volatile.
Received wisdom states that the only way to overcome this volatility is to invest in a diversified portfolio of assets over the long term.
But there are also investment funds that are designed specifically to minimise the risk of short-term peaks and troughs and smooth out an investor’s journey.
That has real appeal at times like these, when there is so much enduring uncertainty affecting global markets, from elections in the US to war in the Middle East.
And if you are investing to a set timescale, like your retirement, that is going to be particularly nerve-racking.
This is exactly what Wesleyan’s With Profits Growth Fund is designed to overcome. It has a proven track record of delivering steady investment growth, through good times and bad, by investing in a diversified mix of UK and international equities, bonds, property, cash and other assets.
The fund is backed by a financially strong mutual, that, without shareholders, has scope to invest with a long-term approach, removing the pressure to pursue short-term gains.
It aims to achieve greater consistency of returns through its unique smoothing mechanism, which reduces the impact of short-term price fluctuations, by holding back some profits when the fund is performing particularly well to be shared out in times when the market is performing poorly.
And it has delivered returns of more than 70% over the last 10 years (to 31 August 2024), while also creating more certainty for investors along that journey.
Alongside this, the fund has a typically low FE fundinfo Risk score, currently 9 (as of 31 August 2024), compared with the FTSE 100, which has a risk score of 100. That’s especially important at a time when interest rates are on a declining trend, weakening the case for holding cash even while markets remain risky.
Increasing exposure, overcoming anxiety
Wesleyan recently surveyed 300 financial advisers* and found that almost three quarters (73%) are already helping all or most of their clients increase their equities exposure in anticipation of interest rates declining further.
Nine in 10 (89%) of this group said this was because they believe cash won’t deliver sufficient returns going forward.
But two in five (43%) said their clients were concerned this strategy would mean more risk, with similar numbers (41%) worried about market volatility.
Against this backdrop, 45% told our survey that they had started or increased their clients’ investments in smoothed funds.
Effective and accessible
The smoothed fund from Wesleyan is an effective and accessible solution; it is available on the independent abrdn Wrap, Nucleus and Wealthtime platforms.
That means it can easily be incorporated into a diversified portfolio.
And – uniquely among smoothed funds – Wesleyan’s fund avoids the need for market value adjustments (MVAs) or unit price adjustments (UPAs) because it is daily priced, daily traded and daily smoothed.
So, advisers can get instant valuation information and clients can access investments in line with standard platform timescales, without waiting days or even weeks.
At times like these, Wesleyan With Profits Growth Fund can be a win-win solution for advisers, helping smooth both clients’ anxieties and market volatilities.
Find more information for advisers on the Wesleyan With Profits Growth Fund here
For UK professional advisers only.
* Survey of 300 UK-based financial advisers, conducted by Censuswide on behalf of Wesleyan between 15th and 21st May 2024.
WESLEYAN’ is a trading name of the Wesleyan Group of companies. Wesleyan Assurance Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Incorporated in England and Wales by Private Act of Parliament (No. ZC145). Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.
