LVOct 19 2020

LV makes smoothed funds accessible to Sipp investors

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LV makes smoothed funds accessible to Sipp investors

LV has launched a trustee investment plan which will give savers wider access to its range of smoothed managed funds.

The new plan is a single-contribution investment policy for trustees of pension schemes that will allow advised savers to invest in LV’s smoothed funds via their self-invested personal pension (Sipp) or small self-administered scheme (Ssas).

Previously, savers were only able to access the smoothed funds exclusively through an LV pension.

LV has also made changes to the smoothing mechanism of this version of the funds to reduce the impact of short-term market volatility.

Smoothing – which works by averaging the daily underlying price of the investments over the previous six months – will now start from the second day of investment and gradually build up to an average of the previous six months of underlying fund prices. 

Previously, the smoothing mechanism began after the investment had been held for six months. 

Clive Bolton, managing director of savings and retirement at LV, said the steep falls in investment markets due to Covid-19 would have “unnerved” many savers.

He said: “LV’s smoothed managed funds can be an invaluable component in retirement planning, as our unique smoothing mechanism has withstood market volatility for over ten years. 

“Our new Trustee Investment Plan is a significant development because it means the funds can be held as an asset of any Sipp or Ssas."

He added: “We’re [...] delighted to be able to make our smoothed managed fund more widely accessible for advisers to build in some volatility protection to a customer’s portfolio. 

“The introduction of gradual smoothing on entry also means that new customers will benefit as they gradually build up their smoothed position right from the start of their investment.”

The smoothed funds are aimed at cautious investors with a low to low-medium risk profile.

These are likely to be clients that are nearing, or in retirement who cannot afford to suffer losses, according to LV.

The funds are managed by Columbia Threadneedle Investments and come in three options - cautious, balanced and growth.

Savers can make regular monthly, quarterly or annual withdrawals with no minimum withdrawal amount set. 

The minimum initial investment for opening a trustee investment plan is £20,000 and the maximum investment permitted is £1m.

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