Aegon has launched a range of core lifestyle funds, which aim to provide more certainty about the size of annuity investors can buy as they near retirement.
The seven Core Risk Profile Lifestyle Portfolios, which have been designed in conjunction with Morningstar OBSR, each have a different risk profile. The funds follow a two-stage investment strategy called lifestyling.
During the initial years (the growth stage), each fund aims to provide long-term capital growth by investing in a diversified portfolio that is aligned to the investor’s risk appetite.
In the second stage (the lifestyle stage), which starts a few years before a target retirement date, the funds progressively switch into long gilts and cash to preserve the size of pension an investor will be able to buy.
The lifestyle portfolios assume investors wish to buy an annuity on retirement.
Mark Pearson, head of investment services at Aegon, said: “We understand that retiring is a major event in life and believe in offering people 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 people’s needs right up to retirement.”