With Profits Income Bond

With Profits Income Bond investment information

Report overview

Before we get started...

  • This information does not constitute investment advice and we recommend that you speak to a financial adviser before making any investment decision based upon this, or any other information.
  • The information below gives an overview of the performance of the assets held in the part of the Liverpool Victoria with-profits fund that With Profits Income Bonds have invested in since July 2022.
  • This includes sustainability information in accordance with the Task Force on Climate-related Financial Disclosure (TCFD) product reporting requirements.

2023 performance review

2023 was a welcome relief for investors in comparison to 2022 as most asset classes posted positive returns. Global equities and bonds performed strongly, returning 22.2% and 5.7% over 2023, respectively.

In Q4 of 2023, markets rallied strongly, with inflation falling by more than estimated by the market (US inflation fell to 3.1% in Q4 2023). This signalled the end of the current interest rate hiking cycle and increased the likelihood of rate cuts in 2024. This was the catalyst for a rally in both equities and bonds.

The main performance drivers included:

  • Our bias to “Growth” and “Quality” styles was very positive over 2023; “Growth” stocks (like those in the technology sector) outperformed “Value” stocks (such as oil companies and banks) over the year, returning 32.1% and 8.8% respectively. 
  • A global diversified investment strategy proved beneficial, as global equities returned 22.2% over the year compared to 7.9% for UK equity. 
  • The US Equity market had outstanding performance over the year, registering a 26.3% return. Significant rises in the price of the “Magnificent Seven” technology stocks (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla) accounting for most stock-market gains.
 
  • Japan’s export-heavy equity market was strong, registering 25.9% gains over the year, supported by a weaker Yen as the Bank of Japan largely maintained its ultra-loose monetary policy stance, and improved governance incentivised companies to spend their balance sheet liquidity.
  • European equities performed well in Q1 2023 due to falling wholesale gas prices and the reopening of China which is one of Europe’s main export markets. This fell away in Q3 in line with most other equity markets, and rebounded in Q4, with strong performance in November and December, with 1 year performance at 18.5%.
  • Bond market performance was mixed. The “higher for longer” interest rate narrative was a headwind for much of 2023. Towards the end of 2023, markets changed tone somewhat, anticipating that the end of the rate hike cycle had been reached. This was a positive driver for bond markets, helping to retrace some of the losses made earlier in 2023.

Standardised performance

The table below shows the investment return (before tax and charges) of the mix of assets the With Profits Income Bond invests in. The With Profits Income Bond has only invested in this mix of assets from July 2022.

Period Investment return
 1 July 2022 to 31 December 2022  -1.64%
 Year to 31 December 2023  9.64%
Period Investment return
 1 July 2022 to 31 December 2022  -1.64%
 Year to 31 December 2023  9.64%

TCFD product report

Our product report provides information in accordance with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD).

  • Sustainability is an integral part of the way we do business. Our TCFD product report aims to give our members, customers, advisers and other stakeholders a greater understanding of the greenhouse gas emissions associated with our investment funds and the potential climate related risk factors.
  • Further information on our approach and what we are doing at LV= to tackle environmental, social and governance issues can be found in our Sustainability Report.
  • Please follow the link below to access the information on your fund. 

With Profits Income Bond TCFD Product Report 2023

Asset management

Asset management During the first half of 2024 the primary asset manager for the fund is changing from Columbia Threadneedle Investments to BlackRock. The primary asset manager is responsible for the day-to-day management of the assets in the fund, operating in accordance with our investment strategy. 

Engagement Policy

LV= has developed an Engagement Policy that demonstrates compliance with the Shareholder Rights Directive II (“SRD”). The purpose of an Engagement Policy is to encourage a responsible investing focus considering both environmental and social issues and to promote transparency. Our asset manager, BlackRock, is fully compliant with the SRD and their Engagement Policy is found on their website.

Read our Engagement Policy