Smooth Managed Fund Price Change

On the 31/08/2021 the price of the Pension Smooth Managed Fund was adjusted by +5.58% to be 122.0p.

Putting the Fund Price Adjustment into context

The global economy has continued to grow in Q2 of 2021 and has recovered much of the ground lost over the past two years. The UK’s own economy surged forward in the second quarter, growing 4.8 per cent as consumers eagerly spent money following the easing of coronavirus restrictions and the progress of the country’s vaccination programme.

Just a reminder - what is a Fund Price Adjustment?

The price of the Smooth Managed Fund increases daily by the Smooth Growth Rate, which is equal to the BoE Base Rate plus 5% per annum for the Pensions fund.

Each day, the price of the Smooth Managed Fund is compared to the value of the underlying assets i.e. the Unsmoothed price. If the difference between the two prices is greater than 6.5% an adjustment is made to bring the Smooth Managed Fund within 1.5% of the Unsmoothed price.

Therefore, when markets perform poorly the underlying assets may lose value, which can trigger a downward Fund Price Adjustment. Equally, in an environment where markets are performing well we may see an upward Fund Price Adjustment. 

This means that over a long-term time horizon, investors will receive similar performance to the underlying holdings. Crucially, however, the client’s investment journey will be much smoother because they are not exposed to daily price movements. 

Find out more

For more information about our Smooth Managed Funds please get in touch in the usual way or visit our Smooth Managed Funds page