Smooth Managed Funds are a range of multi-asset, risk-rated funds intended to grow your investment whilst providing protection against unpredictability in the market. In comparison to traditional investments, Smooth Managed Funds undergo a “smoothing” process which shelters your fund from the dramatic fluctuations typically seen in the stock market. This results in a smoother returns profile, as seen in the example below.
Cumulative performance of LV= FGB Managed Growth Fund and LV= Smoothed Managed Growth Bond. Trustnet.com (2022)
This option is ideal if you are looking for a low-volatility investor experience with potential for better returns than current savings rates. If you are opting for a somewhat “worry-free” approach to investing, Smooth Managed Funds might be the most suitable choice for you.
It is crucial to note that, like all investments, Smooth Managed Funds do carry a level of risk. The value of an investment made into a Smooth Managed Fund can go down in value as well as up, and past performance is not a guide to future performance.