Risk-based fund range
What are they?
Risk-based funds offer you a simple way to invest. You just need to decide how much investment risk you’re able and prepared to take, and the style of fund you want to invest in.
The funds you’re invested in are then managed on your behalf to make sure they maintain an appropriate level of risk and mix of investments, whatever is happening in the markets.
All of the risk-based funds are made up of a mix of investments. This can help spread investment risk and smooth out returns over the longer term, as different types of investments tend to perform differently at different times. Remember, as with any investment, the value can go down as well as up, and may be worth less than what was paid in.
Risk-based funds also give you flexibility – allowing you to change the risk level or investment style if your goals or attitude to risk change. Or you can mix and match two or three funds of the same risk level to create your own investment portfolio.
Risk-based funds might be a good choice for you if:
- You want a simple option, which is managed on your behalf
- You want an option which matches your attitude to risk
- You want a choice of investment styles
- You want an option which includes a mix of investments
Selecting your risk-based funds
You need to follow two simple steps to choose an appropriate risk-based fund for you:
- Decide how you want your money to be managed and
- Decide what level of investment risk is right for you
1. Choose how you want your money managed
Our risk-based funds give you a choice of risk levels and investment styles. They all include a diverse range of investments, such as stocks and shares (equities), bonds, property and money market instruments. They can also include other specialist investments to give even more diversification, reduce the likelihood of significant ups and downs in value, and help deliver returns.
The funds are managed by a team of investment experts at Aberdeen Standard Investments. With the Active Plus and MyFolio Managed funds, this team can decide how much is in each type of investment to try to take advantage of any market opportunities they’ve identified.
Active Plus funds invest mainly in actively managed Standard Life funds.
Passive Plus funds invest mainly in index-tracking (passive) funds managed by Vanguard Asset Management.
MyFolio Managed funds invest mainly in actively managed Aberdeen Standard Investments funds.
2. Choose a risk level you’re comfortable with
There are five funds in each risk-based fund range designed to closely match a different attitude to risk - I being the lowest risk and V the highest. Each of the funds aims to produce the best possible returns for its given level of risk.
So you need to work out how much risk you’re comfortable taking. If you're not comfortable taking any investment risk at all, then risk-based funds aren't suitable for you.
If you’re not sure what your attitude to investment risk is, you can use our risk questionnaire to help you.
Risk level I - lower risk
This option is designed for people who are conservative with their investments. They prefer taking a small amount of risk to achieve modest or relatively stable returns. They accept there may be some short term periods of fluctuation in value.
Risk level II - lower to medium risk
This option is designed for people who are relatively cautious with their investments. They want to try to achieve a reasonable return, and are prepared to accept some risk in doing so. Typically these portfolios will exhibit relatively modest yet frequent fluctuations in value.
Risk level III - medium risk
This option is designed for people with a balanced attitude to risk. They don’t seek risky investments but don’t avoid them either. They are prepared to accept fluctuations in the value of their investments to try and achieve better long term returns. Their investments may be subject to frequent and at times significant fluctuations in value.
Risk level IV - medium to higher risk
This option is designed for people who are relatively comfortable with investment risk. They aim for higher long term returns and understand that this can also mean some sustained periods of poorer performance. They are prepared to accept significant fluctuations in value to try and achieve better long term returns.
Risk level V - higher risk
This option is designed for people who are very comfortable with investment risk. They aim for high long term investment returns and do not overly worry about periods of poorer performance in the short to medium term. Ordinarily these portfolios can be subject to the full extent and frequency of stock market fluctuations.
As well as thinking about how you feel about investment risk, you should also consider how much risk you're able to take with your money, bearing in mind your other financial commitments and personal circumstances.
Important documents
To help you make an informed decision we've provided you with important information that you should read. You should print or save copies of these documents for future reference.
This form is used to request for the scheme to pay the Annual Allowance Charge.
This document explains the features of the pension product your employer has chosen.
This document explains the features of the pension product your employer has chosen.
This document provides you with more information on how you can take money from your pension flexibly. For more information on the other options available please see the key features document above.
Read this guide for more information on choosing your investment options if you decide to take money from your pension flexibly.
Choosing investment options for a flexible income PDF, 119KB
This document gives you an illustration of what your pension could be worth.
This document gives you an illustration of what your one-off payment could be worth when you retire. Read this if you are thinking about participating in the DB FRP Bonus Waiver offer.
DB FRP Key features illustration - Single Transfer (PDF, 191KB)
Read this guide for more information on your investment options, including details about charges and fund codes.
How to choose the right investment options for your pension (PDF, 896kb)
Read this guide for more information about how the DB Flexible Retirement Plan works.
Read this guide for more information on the different ways you can pay into your pension, and the tax benefits and tax charges which can apply.
Information about tax relief, limits and your pension (PDF, 99KB)
Use this form to nominate any death benefits under the DB Flexible Retirement Plan.
Use this form if you'd like to switch from the DB FRP into a Group Self-Invested Personal Pension Plan (GSIPP). More about GSIPP.
Use this form to nominate any death benefits under the DB Group SIPP.
GSIPP - instruction for payment of death benefits (PDF, 77kb)
