Multi-asset class takes the crown in drawdown market boom
30 Aug 17
While the number of retirees opting for drawdown has more than trebled since the introduction of the pension freedoms, retiring investors are choosing funds with long-term investment targets to meet near-term income needs, research from Dutch insurer and pension provider Aegon shows.
Aegon’s analysis suggests that retired investors using multi-asset investments are reducing risk. Across a sample selection of six multi-asset fund ranges, most drawdown investors are in funds at risk levels three or four on Distribution Technology’s 1-10 risk scale, compared to most non-drawdown savers investing in risk profiles four or five.
Aegon does however raise a note of caution. “Investors have experienced broadly positive markets in the two years since the new pension rules were introduced, but a significant market shock could wipe years off retirement income unless investment strategies are de-risked to meet the particular requirements of retired investors,” the firm said.
Tags: Drawdown
