It is broadly accepted that the ‘Baby Boomers’ are the first generation of mass investors and as this generation grows older, it has a greater need for products that fall into the first three outcomes. However, the fourth outcome, capital accumulation, remains equally critical for a multitude of investors seeking to continue to grow their investment and pension plans.
What is important to stress is that in order to meet this outcome, it should not mean that investors are forced to take on unnecessary risks to grow their capital. Our view is that investors and advisers should be better informed of the potential risks associated with their fund choices and what type of investment journey this could bring. A key element of this is ensuring the fund manager adheres to a performance objective, in terms of realistic return expectations and time frames that are clear and relevant.
Some fund management groups have responded positively to this particularly now that passive vehicles have increased in popularity as lower cost options to gain broader market exposure. Indeed some groups have sought to evolve products away from “me too” propositions and provide investors with funds that not only offer a differentiated approach but that are also competitively priced.
Click here for the five funds that provide capital accumulation from across the risk spectrum