Aegon has launched a range of risk-rated funds aimed at giving investors more certainty about their income as they reach retirement.
The funds, called the Core Risk Profile Lifestyle Portfolios, are funds of funds and invest predominantly in tracker funds, property and cash.
The funds, which range from adventurous to cautious, will be run on a process Aegon has called ‘lifestyling’ meaning they will initially invest in a diversified portfolio then gradually switch to long gilts and cash to preserve capital in the years leading up to a client’s retirement.
The funds assume investors plan to buy an annuity on retirement. The cash allocation is aimed to cater for the tax-free cash lump sum, which, currently legislation, 25% of a pension pot.
The range follows from Aegon’s launch of Core Risk Profile Portfolios in June this year.
Mark Pearson, Aegon head of investment services, said the new portfolios showed Aegon was not reliant on third parties to launch investment products.
‘The launches demonstrate that we don’t only work with strategic partners on bespoke products, but also have the capacity to develop our own solutions to cater for investors changing needs as they approach retirement, ‘ he said. ‘We understand that retiring is a major event in life and believe in offering customers a simple, low cost solution that matches their attitude to risk. The availability of the lifestyle versions of these funds means we can now cater for those customers’ needs right up to retirement.’