Smooth Managed Fund Price Change

On the 9/3/2022 the price of the Pension and ISA Smooth Managed Fund was adjusted by -4.80% to be 118.92p.

Putting the Fund Price Adjustment into context

Ukraine-Russia tensions have been building for several months prior to the military action taken. However, an invasion was considered far from inevitable. Its arrival has had an immediate impact on financial markets, with risk assets selling off and a general flight to safety towards the major government bond markets. Going forward we expect to see continued volatility in markets as this crisis unfolds.

Just a reminder - what is a Fund Price Adjustment?

The price of the Smooth Managed Fund increases daily by the Smooth Growth Rate. The Pension and ISA Smooth Managed Fund Smooth Growth Rate is equal to the Bank of England Base Rate plus 5% per year.

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