Smooth Managed Funds

Aviva Smooth Managed Funds offer your clients a more relaxed approach to investing while smoothing 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.

Your clients' investment in the Smooth Managed Funds 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.

For more detail on the Smooth Managed Funds and where they are invested see the fund guide or the fund fact sheets: 

Pension (S14) Smooth Managed Fund fact sheet (PDF)

Pension (S14) Smooth Managed Fund 2 fact sheet (PDF)

Life (S4) Smooth Managed Fund fact sheet (PDF)

Life (S4) Smooth Managed Fund 2 fact sheet (PDF)

ISA (S15) Smooth Managed Fund fact sheet (PDF)

ISA (S15) Smooth Managed Fund 2 fact sheet (PDF)

How the smoothing works

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

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

The Pension and ISA Smooth Managed Fund 2 Smooth Growth Rate is equal to the Bank of England Base Rate plus 3.75% per year.

The  Select Investment Bond Smooth Managed Fund Smooth Growth Rate is equal to the Bank of England Base Rate plus 4% per year.

The Select Investment Bond Smooth Managed Fund 2 Smooth Growth Rate is equal to the Bank of England Base Rate plus 3% per year.

The price of each Smooth Managed Fund will usually increase daily in line with the Smooth Growth Rate (less charges for the Pension and ISA funds)– we call this the smoothed price.

Aviva Smooth Managed Fund - The fund invests in a broad range of global assets which can change over time as the managers aim to keep the investment risk in line with a moderately cautious risk profile

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.

Aviva Smooth Managed Fund 2 - The fund invests in a broad range of global assets which can change over time as the managers aim to keep the investment risk in line with a cautious risk profile

Who may the Smooth Managed Fund 2 be suitable for?

• Clients who are prepared to take a low to moderate amount 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.

Fund price adjustments are applied to the Smooth Managed Funds 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.

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 a Smooth Managed Fund
• The unsmoothed price of the Fund - The value of assets divided by the number of units in a 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%.