With-Profits Investment information

All-In-1 Investment Bond and Guaranteed Capital Bond fund management and performance

Report overview

Before we get started...

  • This information does not constitute investment advice and we recommend that you speak to a suitably qualified financial adviser before making any investment decision based upon this, or any other information.
  • The information below gives an overview of the performance of your bond for the period 1 January 2020 to 31 December 2020. 

Market and Economic Review

This review is based on information and commentary provided by Columbia Threadneedle Investments.

Despite steep volatility through the first half of the year, 2020 ended much like it began; an equity bull market, touching all-time highs. The year was defined by the pandemic, with market performance being driven by government and consumer responses. Emerging markets, particularly Asia and especially China, where the impact of the virus was constrained, outperformed developed markets struggling to contain a second wave of infections. 

The stimulus provided by governments drove a faster than anticipated recovery in equity markets where most regions notched gains over 2020. However this was a far from equal recovery. Consumer demand, changed by ‘stay-at-home’ policies, accelerated demand for certain technologies and an almost exclusive use of online retail. Demand for a vaccine drove the outperformance in the healthcare sector. Other sectors and regions have not yet recovered, and for some, such a recovery is uncertain to materialise. 

Vaccines were first approved for use during December. The big breakthrough for markets came on 9 November 2020, when Pfizer and BioNTech reported they had achieved over 90% effectiveness in large-scale human trials. The news sparked a surge in oil prices and equity markets saw investors switch out of year-to-date winners into beaten-down stocks that had most to gain from a resumption of normal economic activity. 

 
Aside from the virus and the vaccine, markets were focused on the US elections and Brexit. Investors welcomed a clear Biden victory and the avoidance of a no-deal Brexit. 

During Q4, the equity rally lost pace slightly from the second half of November onwards, with gains capped by concerns about the new virus strains and slower-than-hoped vaccine distribution. Energy and financials led the rally, while consumer staples (such as food and household goods) and healthcare were weakest. 

Also during Q4, core fixed income markets had mixed fortunes. The 10-year US Treasury yield increased (meaning prices fell), driven upwards by rising expectations for US fiscal stimulus and inflation. The yield for German and UK equivalents both edged downwards linked to lockdown worries and increased central-bank purchases. The yield from US and European corporate bonds also fell.
 

Unit price and performance of each fund option available

Your individual statement will show you the number of units, the unit price, the value of your bond and the fund option in which you are invested at your bond’s last anniversary. Find the current unit price of your bond. This information should be read alongside your Policy Conditions and Key Features document. You need to be aware that in each fund option your investment can go down as well as up. The higher the amount invested in equities, the more frequently this will happen and the more significant the changes in value are likely to be.

Cautious fund

This fund option is designed to provide modest growth with a lower chance of losing money than the Balanced and Growth fund options. It invests mostly in fixed interest investments with the balance in property and equities. This is the lowest risk fund option under this bond and therefore offers the lowest growth potential.

Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 225.1p 4.0%  
125.1%
31 December 2019 216.5p 8.1%
31 December 2018 200.3p  1.9%
31 December 2017 196.5p  1.5%
31 December 2016 193.6p 9.4%
31 December 2015 176.9p  7.3%
31 December 2014 164.9p  7.4%
31 December 2013 153.6p  1.5%
Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 225.1p 4.0%  
125.1%
31 December 2019 216.5p 8.1%
31 December 2018 200.3p  1.9%
31 December 2017 196.5p  1.5%
31 December 2016 193.6p 9.4%
31 December 2015 176.9p  7.3%
31 December 2014 164.9p  7.4%
31 December 2013 153.6p  1.5%

Balanced fund

This fund option is designed to provide the potential for modest growth without exposure to undue risk. It invests broadly in equal amounts of equities, fixed interest investments and property. This is the middle risk fund option and is higher risk than the Cautious fund option and lower risk than the Growth fund option.

Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 253.1p -1.9%  
31 December 2019 257.9p 2.1%  
153.1%
31 December 2018 252.5p  3.9%
31 December 2017 243.1p  6.9%
31 December 2016 227.4p 9.3%
31 December 2015 208.1p  13.7%
31 December 2014 183.0p  12.8%
31 December 2013 162.3p  11.0%
Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 253.1p -1.9%  
31 December 2019 257.9p 2.1%  
153.1%
31 December 2018 252.5p  3.9%
31 December 2017 243.1p  6.9%
31 December 2016 227.4p 9.3%
31 December 2015 208.1p  13.7%
31 December 2014 183.0p  12.8%
31 December 2013 162.3p  11.0%

Growth fund

This fund option is designed to provide the potential for the highest level of capital growth of the three fund options but with an increased risk to capital. This fund option invests mostly in equities with the balance invested in property and fixed interest investments. This is the highest risk fund option and offers the highest growth potential.

Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 294.7p 4.6%  
31 December 2019 281.7p 4.8%  
31 December 2018 268.7p  3.7% 194.7%
31 December 2017 259.0p  12.4%
31 December 2016 230.4p 12.4%
31 December 2015 205.0p  8.0%
31 December 2014 189.9p  8.3%
31 December 2013 175.3p  18.8%
Unit Price Date Unit Price*  Growth (%) for the 12 months to the date shown  Total percentage growth from 4 November 2005 (launch) to 31 December 2020
31 December 2020 294.7p 4.6%  
31 December 2019 281.7p 4.8%  
31 December 2018 268.7p  3.7% 194.7%
31 December 2017 259.0p  12.4%
31 December 2016 230.4p 12.4%
31 December 2015 205.0p  8.0%
31 December 2014 189.9p  8.3%
31 December 2013 175.3p  18.8%

Performance Review

Whilst strong performance was generated across all regions, two in particular stood out: the Japan equity asset class outperformed the benchmark by 17.2% whilst the Emerging Markets equity assets outperformed by 15.3%, (both in Sterling terms). Within the Global Emerging Markets portfolio, almost half the outperformance was due to Chinese stock selection where technology and healthcare were the dominant success stories. 

In Japan, Technology and Industrials stocks drove the outperformance. The fund also benefitted from opportunities after the March 2020 lows to purchase quality stocks at attractive valuations that were previously considered too expensive.

US equities returned 19.0% for the year against the benchmark return of 15.5% with Technology stocks a dominant success story during 2020. Profits in several stocks were taken to allow investment in assets that subsequently benefitted from the buoyant vaccine news. These changes were designed to take advantage of the reflation/recovery stage now being entered.

The European equity portfolio delivered strong outperformance against its benchmark (the assets returned 5.1% whereas the benchmark returned 2.8%) during the year. Stock selection accounted for all the outperformance led by Technology and Industrials. 

UK equity assets (-8.9%) outperformed the FTSE All Share (-9.8%) over the year helped by stock selection within Industrials. Overall, the UK equity market lagged behind all major equity markets during 2020. Fears of a no-deal Brexit hampered the market throughout the year. The market also suffered for its relatively high exposure to energy-related stocks.
 

 The UK corporate-bond portfolio returned 10.8% for the year, outperforming its benchmark, which returned 9.6%. Strong performance came from the 70% holding in medium and long-dated bonds, which outperformed short-dated bonds during 2020. Stock selection was the main driver for the funds outperformance.

The diversification into Developed Markets bonds late in 2019 proved positive as the fund returned 9.7% for the year, comfortably ahead of its benchmark return of 7.2%. 

The benefit of the funds exposure to both UK Gilts and US Treasuries was most noticeable during quarter 1, where these assets offset equity weakness within the fund. Their resilient characteristics resulted in stable performance throughout the year. Due to the strong returns across most asset classes, the Multi-Asset fund (DRR) performed strongly returning 8.2%, comfortably ahead of its target of 4.6%. 

Despite rebounding during the second half of 2020, Property assets experienced a difficult year, ending down -2.9% over the 12 months. The assets are UK focussed which suffered heavily during the lockdown. The funds return was also negatively impacted by the direct property assets.

 

Columbia Threadneedle Investments

  • Since 1 November 2011 the asset management of our funds has been undertaken on our behalf by Columbia Threadneedle Investments. Columbia Threadneedle is responsible for the day to day management of the assets within investment guidelines set by LV=.
  • Columbia Threadneedle is a leading international investment manager that manages £400bn of assets (as at 31 December 2020), investing on behalf of individuals, pension funds, insurers and corporations. Columbia Threadneedle is the global asset management group of Ameriprise Financial, a leading US-based financial services provider. Columbia Threadneedle’s website address is columbiathreadneedle.co.uk.