Multi-asset class takes the crown in drawdown market boom
By , 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
