IncludedImage
 

IN BRIEF

An active, affordably priced diversified growth fund designed to help defined contribution (DC) pension scheme members achieve a smoother path to retirement. Adding this dynamic, highly diversified fund to a default strategy can help reduce overall portfolio risk and boost returns.

Life Diversified Growth Fund is founded on the expertise of Multi-Asset Solutions at J.P. Morgan Asset Management—a team of dedicated multi-asset investors with extensive experience in building solutions for DC savers.

Our mission is to provide a core DGF designed to deliver diversification and a smoother journey for DC savers as they grow their retirement savings.

  • Designed for the DC journey
  • Active at an affordable price
  • Managed by multi-asset experts
  • Underpinned by robust risk management

Better DC outcomes require smoother journeys

Given their very long investment horizons, DC savers are well placed to ride out market volatility—in theory. In practice, though, even short-term losses can have a significant impact on outcomes, because of their effect on member behaviour.

Sharp declines in the size of their pots can cause members to reduce saving rates—or to stop saving altogether. Steadier, more consistent returns are therefore vital in encouraging members to stay the course.

JPMorgan Life Diversified Growth Fund is designed to help. Drawing on the multi-asset expertise of J.P. Morgan Asset Management, the fund seeks to provide DC members with diversification and a smoother journey as they grow their retirement savings.

By allocating dynamically across a broad range of asset classes and maintaining a highly diversified portfolio that includes equities, bonds and alternatives, the fund can help members to grow their pots with reduced fear of large losses along the journey to retirement.

What are diversified growth funds?

Diversified growth funds aim to produce attractive returns over the long term while reducing the volatility associated with high-growth assets such as equities. They aim to achieve this by investing across a wide range of asset classes, and may use active asset allocation to enhance potential returns.


JPMorgan Life Diversified Growth Fund
  • Return profile: Cash plus 4%
  • Target volatility: 6-10% annualised over the medium term
  • Annual charge: 30 bps TER1

Source: J.P. Morgan Asset Management March 2017

1The fee discount will be applied to all investments made until the fund reaches £500 million and will last for the lifetime of each investment.

Designed with DC members in mind

Life Diversified Growth Fund is a core DGF built for DC savers. The active investment approach makes members’ assets work as hard as possible for their futures, while the goal of providing a smoother journey is aligned with members’ own attitudes to risk.

Affordability without compromise

Affordability in DC solutions must not come at the expense of member outcomes. Life Diversified Growth Fund aims to maximise the avenues of return available to members with an active investment approach—at the asset allocation, fund selection and underlying fund levels—for an annual charge of 30 bps, well below the 75bps charge cap.

Built for the DC journey

Life Diversified Growth Fund is designed to help members achieve smoother returns on the journey to retirement. The chart shows an initial allocation of 50% to the fund, alongside a 50% equity allocation. This diversified blend provides similar returns to a 100% equity allocation, but with much lower volatility—helping members to stay the course and keep saving to achieve their retirement goals.

EXAMPLE LIFECYCLE GLIDE PATH WITH JPMORGAN LIFE DIVERSIFIED GROWTH FUND
IncludedImage

Source: J.P. Morgan Asset Management, March 2017. For illustrative purposes only

Our mission is to provide a core DGF designed to deliver diversification and a smoother journey for DC savers as they grow their retirement savings

Active investing within a robust risk framework

Greater diversification can reduce expected volatility without sacrificing return potential. Life Diversified Growth Fund provides DC savers with affordable access to a wide range of asset classes, including alternatives, to help smooth the journey in difficult markets without restricting gains in rising markets.

Dynamic active investing

The strategic framework reflects our long-term expectations for markets. Active asset allocation around this strategic allocation gives the managers the flexibility to take advantage of opportunities when they arise and to be more defensive in periods of uncertainty, making sure the fund maintains a focus on providing smoother growth.

Active manager selection allows us to allocate to a blend of underlying funds that complement each other, meet the portfolio objective and are suited to the prevailing market conditions. Active management within these funds provides a further source of potential returns.

Rigorous risk management

Risk management is central to our investment process and is focused on our goal of delivering a smoother journey. Dedicated multi-asset risk specialists embedded in the team use an integrated, multi-dimensional risk framework to provide frequent reporting that feeds directly into investment decisions. An independent risk team adds a further layer of oversight.

A HIGHLY DIVERSIFIED STRATEGIC ALLOCATION
IncludedImage

Source: J.P. Morgan Asset Management March 2017.

Powered by award-winning multi-asset expertise

J.P. Morgan Asset Management has been managing DC solutions for over 40 years, and today we look after over GBP 160 billion of members’ assets*. Through the years and in changing market conditions, we have maintained the simple goal of helping DC members to achieve a more secure income in retirement.

A long history of multi-asset expertise

The Life Diversified Growth Fund is managed by Multi-Asset Solutions, the team behind our award-winning SmartRetirement target date funds. Multi-Asset Solutions formulates investment insights through its capital markets research and analysis of the global macroeconomic environment and development of portfolio design. These extensive resources and global perspectives support the team’s evaluation of market opportunities, inform their multi-asset investment decisions, and assist as they strive to deliver consistent, risk-adjusted investment results.

Widely respected long-term insight

The strategic framework reflects our Long-Term Capital Market Assumptions—our assessment of the long-term outlook for all major asset classes and markets. Now in their 21st year, the assumptions are one of the most established and comprehensive sets of capital market estimates in the industry, and underpin the investment decisions of institutions and advisors around the globe.

A world of specialist investment knowledge

The team draws on the breadth and depth of the fund platform at J.P. Morgan Asset Management, selecting from over 500 strategies across asset classes, geographies and styles. We can also use third-party investment trusts, drawing on the portfolio management team’s considerable expertise in researching these vehicles. As tradeable closed-ended vehicles, investment trusts can be a particularly good way to gain access to illiquid asset classes, such as private equity and infrastructure. The fund can also use exchange-traded funds.

Unrivalled multi-asset investment capabilities
  • 40+ years of managing institutional multi-asset portfolios
  • 70 dedicated multi-asset professionals
  • GBP 150 billion in multi-asset mandates
  • DC-Multi Asset Fund Manager of the Year, Professional Pensions UK Pension Awards 2017

Source: J.P. Morgan Asset Management as at 31 December 2016.

 

Would you like to download the PDF?

IncludedImage Download PDF