LV= launches smoothed bond for cautious investors

  • One in five adults worry that inflation is eroding the value of their savings but nearly two-thirds are too worried about market volatility to consider moving their funds into higher-risk investments 
  • LV= launches Smoothed Bond that now begins to average daily unit prices from day 2 until fully smoothed over a rolling 26 week period to reduce investment market volatility
  • Includes access to 5 choices of risk rated 2-6 funds

Research from pensions and retirement specialist LV= highlights how rising inflation is a growing worry for savers. 
The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000 UK adults – reveals:

  • Retirees have seen their living costs increase by nearly £2,000 a year
  • One in five (21%) of UK adults worry that inflation is eroding the value of their savings but 63% are too worried about investment volatility to consider moving money into higher-risk investments
  • And one in ten (11%) would respond to a substantial fall in the market by taking out some or all of their remaining investment.

As consumers’ fears about inflation and market volatility increase, LV= is launching a new Smoothed Bond designed to reduce investment volatility. 

The smoothing mechanism for the new Bond has been enhanced to start protecting investors from market volatility from the second day of investment, gradually building until it fully averages daily unit prices over the previous 26 weeks to reduce short-term market fluctuations. And advisers and their clients can now select from a recently extended choice of 5 funds in the Smoothed Managed range; Extra Cautious, Cautious, Balanced, Growth and Impact Growth, which are risk rated as 2,3,4,5 and 6 respectively. It is designed for the majority of UK investors with a low to medium risk profile.

With a new simplified charging structure and fund size discounts the annual management charge (AMC) for new business applications will be discounted from 0.9% to 0.85% until 30th November 2022. The minimum investment is £5,000 and fund size discounts will apply to investments of >£100,000 with up to 0.15% discount for aggregate investments over £0.5M 

LV= Smoothed Bond forms part of a suite of LV= Smoothed Managed Funds, which includes LV= Smoothed Pension, LV= Trustee Investment Plan and LV= ISA. The funds are managed by the global asset manager Columbia Threadneedle Investments working in collaboration with the Investment Management Group at LV=.

LV= launches two Smoothed Managed Funds

LV= added two funds to its Smoothed Managed Funds (SMF) range in May 2022 to appeal to a wider range of investors.

The new funds - Extra Cautious and Impact Growth - are risk-rated 2 and 6 respectively. Both feature LV=’s unique smoothing mechanism.  

The new Extra Cautious Smoothed Managed Fund is targeted at low-risk investors who would normally prefer to hold their savings in cash but who are concerned that rising inflation and low returns on deposit accounts are eroding the value of their savings. The key objective is long term steady investment growth with a low level of investment risk. The asset mix of the fund will be about 65% bonds, 20% equities, 10% property, and 5% cash.

The new Impact Growth fund option is designed to deliver long-term steady and sustainable growth with a medium level of investment risk. The proportion invested in equities and property is usually about 70%. 

David Stevens, Retirement Director at LV= said:  

“LV=’s Smoothed Managed Funds are becoming increasingly popular among financial advisers and mass affluent investors because of their strong track record on performance resilience and returns.

Last year’s figures show a doubling of inflows into the SMF range totalling £437m.

“Our research revealed that 53% of mass affluent customers are too worried about stock market volatility to move savings to a higher risk investment in order to achieve more growth. For retirees, this figure rises to 76%, showing just how cautious many savers and investors are when it comes to their finances. 

It highlights a real conundrum for cautious investors on how to find a way of accessing investment returns that can defend and develop growth against the erosion of inflation, but also can deliver a smoother ride and help sooth understandable investor nerves through the short term ups and downs of the market” 

 “We think the performance track record of the Smoothed Managed Funds range, with its unique and improved smoothing mechanism that now starts working from day-2, addresses this dilemma and represents a value adding solution for advisers to help those investors who are uncomfortable with the short-term ups and downs of investments make more confident choices.” 

About LV= Smoothed Managed Funds

LV=’s Smoothed Managed Fund range is designed to provide steady long-term growth over a period of at least five years. LV=’s smoothing process doesn’t mean investments will not drop in value. Smoothing will not prevent losses in longer term falling markets and investments may go down as well as up. The smoothing process has continued to perform as intended through the extreme volatility seen as a result of Covid-19. However, in exceptional conditions (for example, if the underlying price is 80% of the averaged or ‘smoothed’ price) the fund may be valued on the underlying price. We also reserve the right to do this at other times.


For further information please contact:

David Gwyer
Media Relations Manager – Life & Pensions
07798 796907
Candice South
Press Officer - Life & Pensions
07867 141547

About LV=

LV= is a leading financial mutual and serves over 1.3 million members with a range of financial products. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products. We offer our services direct to consumers, as well as through IFAs. 

LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.