Aviva Platform and Investments

Smooth Managed Fund

Helping to shelter your clients from market volatility

The Smooth Managed Fund aims to deliver growth over the medium to long term, employing a ‘smoothing’ process to shelter your clients from some of the impact of adverse market movements.

The fund invests in a broad range of global assets which can change over time as we aim to keep the investment risk in line with a medium risk profile.

Adaptability

The fund invests in a broad range of global assets which can change over time to keep the investment in line with a medium risk profile

Smoothing

A smoothing process is applied to the fund to level out some of the short-term ups and downs of the stock market

Linked to the base rate

We’ve set a Smooth Growth Rate which is linked to the Bank of England Base Rate

Fund details

Why Smooth Managed Fund?

Aviva Smooth Managed Fund offers your clients a more relaxed approach to investing while aiming to smooth some of the short-term ups and downs of direct stock market investments.

Risk can be spread by diversifying, through investing in different assets from across the world. Professional investment managers do the hard work, so your clients can feel relaxed about investing.

It’s all in one fund, from a company with £346 billion under management. As at December 2019.

Your clients' investment in the Smooth Managed Fund can go down as well as up in value and they may get back less than they invested. In particular, a large fall in the market can lead to a price adjustment which could cause a sharp drop in the fund value.

Under exceptional circumstances, the smoothed price can be reset to equal the price of assets in the fund. This could happen if a significant number of customers leave the fund over a short period of time.

Past performance

How would the Aviva Smooth Managed Fund have performed over the past five years?

Review the pension sales aid and bond sale aid to find out more information.

For more detail on the Smooth Managed Fund and where it is invested see the fund fact sheet and the fund guide.

Facts and figures

How the smoothing works

A Smooth Growth Rate is set for the fund, which is the rate at which the smoothed price will increase.

For the Pension fund, Smooth Growth Rate is equal to the Bank of England Base Rate plus 5% per year.

For the Life Fund, the Smooth Growth Rate is equal to the Bank of England Base Rate plus 4% Per year.

The Smooth Managed Fund price will usually increase daily in line with the Smooth Growth Rate – we call this the smoothed price.

Strategic Asset Allocation at February 19 (see latest fund factsheet for most up to date asset allocation)
UK Equities 4.36% 
Global Equities 51.15%
Global Bonds 26.99% 
Property 7.50% 
Absolute Return 5.00% 

Cash

5.00%

Client suitability

Who may the Smooth Managed Fund be suitable for?

  • Clients who are prepared to take a medium degree of risk with their investment in return for the prospect of improving longer term performance
  • Clients who are comfortable that their investment may rise and fall in value over time and they may get back less than they invested
  • Clients who prefer to spread risk by investing in a wide range of assets and see their money typically be invested more in shares and/or property than fixed interest assets
  • Clients who accept that having a broad spread of assets may limit the potential returns but should help to minimise the fluctuations
  • Clients who would be prepared to stay invested in the fund for at least 5 years.

Client case studies:

Fund price adjustments

Fund price adjustments are applied to the Smooth Managed Fund when the smoothed price is at least 6.5% higher (or lower) than the unsmoothed price. The adjusted smoothed price will be 1.5% higher (or lower) than the unsmoothed price.

 

For the Pension fund, the Smooth Growth Rate is equal to the Bank of England Base Rate plus 5% per year.

For the Life Fund, the Smooth Growth Rate is equal to the Bank of England Base Rate plus 4% Per year.

Two prices are used, on a daily basis, to determine whether or not a Fund Price Adjustment needs to be applied:

  • The smoothed price of the Fund - This is the price that you pay to buy and sell units in the Smooth Managed Fund
  • The unsmoothed price of the Fund - The value of assets divided by the number of units in the Smooth Managed Fund

If the difference between the two prices above is 6.5% or more, we will automatically adjust the smoothed price so that the difference is 1.5%.

Date Price Adjustment Fund More info 
18 Dec 2018   -5% Pension  -
 30 Jul 2019 +5.4% Pension  Find out more
9 March 2020 -6.72% Pension Find out more
10 March 2020 -5.2% Bond Find out more
12 March 2020 -7.1% Pension Find out more
12 March 2020 -4.8% Bond Find out more
28 May 2020 +6.2% Pension Find out more
28 May 2020 +5.3% Bond Find out more

Smooth Managed Historic Growth Rates

Bond
Date Historic Smooth Growth Rate
11 Feb 2019 4.75%
11 March 2020 4.25%
19 March 2020 4.10%
Pension
Date Historic Smooth Growth Rate
11 Dec 2017 5.50%
02 Aug 2018 5.75%
11 March 2020 5.25%
19 March 2020 5.10%

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