Smoothed Managed Funds

Reducing risk with smoothed funds

Overview

Smoothed Managed Funds range

When making an investment, you ought to consider what's more important: investment performance, accessibility, or a combination of the two. Our Smoothed Managed Funds range is designed to offer you a stable, but flexible investing experience with less worry.

Key Features

Our Smoothed Managed Funds range is made up of the LV= Smoothed Pension, LV= Smoothed Bond, LV= ISA and the LV= TIP.

While one product may be more suited to you, they all have a few things in common:

Each product benefits from our unique smoothing process to help level the peaks and troughs of the stock market.
You can choose from a range of independently risk-rated investment funds to meet your attitude to risk.
The funds are managed by our award-winning in-house team and leading investment managers.
Our smoothed funds have low impact charges, meaning your investment won’t be eaten into by high fees.
Should you pass away while you hold your policy, we will make a payment of a percentage of the fund value to your family.
Optional guarantees are available to secure capital on Cautious fund investments.

Smoothing

Reducing the impact of market ups and downs

The LV= Smoothed Managed Funds incorporate a unique averaging mechanism called 'smoothing' which is designed to smooth out the impact of short-term market movements.

How does it work?

On day one your money is invested into your chosen fund(s) at the fund’s underlying unit price.

On day two the daily underlying unit prices for day one and day two are added together and divided by two.

On day three the daily underlying unit price for all three days are added together and divided by three, and so on. This process continues up to 26 weeks.

After 26 weeks, your investment value will usually be an average of the preceding 26 weeks. This means that for the rest of your time invested with us, however long that might be, your investment will be cushioned from the immediate impact of daily fluctuations in the market.

For customers investing in our LV= ISA, the process is a little different. In the first 26 weeks – when you invest in our smoothed funds, the investment is valued at the underlying price for the first 26 weeks. After the first 26 weeks – the smoothing mechanism kicks in and your fund is valued at the average daily price of the previous 26 weeks.

Please note that smoothing can be suspended at our discretion in extreme circumstances.

Explaining our smoothing mechanism

View video transcript

Are you looking for an investment option that aims to grow your fund while providing a calmer experience?

Our Smoothed Managed Funds have a built-in smoothing mechanism to help provide you with a calmer investment journey by using fund price averaging to smooth out the traditional peaks and troughs of stock market investing.

The LV= Smoothed Managed Fund range uses a unique averaging mechanism called ‘smoothing’. Here’s how it works.

On day one, your money is invested into your chosen fund(s) at the fund’s underlying unit price.

On day 2 the daily underlying unit prices for day 1 and day 2 are added together and divided by 2.

On day 3 the daily underlying unit price for all 3 days are added together and divided by 3, and so on. This process continues up to 26 weeks.

Once you’ve been invested for 26 weeks, your investment value will be a rolling 26 week average of daily underlying fund prices.

This means if markets are growing, you may see smoothed prices increasing at a slower rate than prices of unsmoothed funds. But, if markets are falling or fluctuating, you won’t see the same sudden changes in value as you would in an unsmoothed fund.

The smoothing mechanism will help to cushion the impact of daily market fluctuations, so you experience a calmer investment journey.

You may find this valuable if you’re nearing retirement, you’re already taking a retirement income, or simply looking to reduce the impact of stock market volatility on your investments.

Our robust smoothing mechanism has allowed our members to experience calmer investment journeys since it was first launched in 2006.

It has remained stable even through the financial crisis of 2008 and the Coronavirus pandemic in 2020.

LV’s smoothed funds are designed to help to reduce the stress and worry that can come with stock market investing.

Speak to your financial adviser to discuss how LV=’s Smoothed Managed Funds could be right for you.

Capital at risk. Past performance is not a reliable indicator of future returns.

Smoothing can be suspended at our discretion. This may be in exceptional conditions or if the underlying price was typically 80% or less of the averaged price. If smoothing was suspended the funds may need to be valued using the underlying price. The LV= ISA will always be valued on the underlying price at this time. We also have discretion to use a daily gradual averaged price with an appropriate smoothing period of up to 26 weeks.

For more information on our smoothing mechanism, download our fund guides or visit LV.com/investments

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Please remember this stock market related investment can rise and fall in value. This means you’re not certain to make a profit and you could get back less than you invested.

Your options

Our Smoothed Managed Funds range

LV= Smoothed Bond

With a range of fund options, the LV= Smoothed Bond allows you to decide how much risk you want to take.

More about the LV= Smoothed Bond

LV= Smoothed Pension

The LV= Smoothed Pension offers a range of multi-asset funds that are available through our Self-Invested Personal Pension (Flexible Transitions Account).

More about LV= Smoothed Pension

LV= ISA

Our Stocks and Shares ISA can provide tax-efficient savings with long term growth potential, tailored to your appetite for risk.

More about LV= ISA

LV= TIP

The LV= TIP is a plan which allows you access to our unique smoothed funds as part of your existing Self-Invested Personal Pension (SIPP) or Small Self-administered Scheme (SSAS) without transferring away.

More about LV= TIP

Next Steps

Getting the most from your money

To help you get the most from your money, you can speak to a financial adviser. If you don’t have a financial adviser you can find one near to you on unbiased.co.uk, or you can have a chat with one of our investment advice specialists.

Please note that the information given on these pages should not be seen as advice to take out this product.