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Deciding where to invest

You can control how your savings are invested.

There are some key things you need to consider when thinking about your investment choices, such as how long you expect to be saving into your Plan, whether you prefer to make your own investment decisions, and how much risk you feel comfortable with.

The Plan’s default strategy aims to grow and protect your savings, automatically changing investments based on your expected retirement age. If the rules of your Plan allow, you might be able to choose your own investments by self-selecting funds to suit your goals.

If you plan to access your savings before your planned retirement date, it’s important to check your plan information in PlanViewer to determine if you need to adjust your investment choices to meet your future needs.

Whichever you choose, you should ensure that you understand the basics about investing your savings.

Reviewing your investments

You can see how your savings are invested on PlanViewer. Select ‘Plan information’ from the top menu, then ‘Plan overview’ and view the funds your savings are invested in.

If you click on the fund name, you’ll be taken to the fund factsheet with information including the fund’s objective, performance, the top ten companies or assets the fund holds, and risk information.

Whichever investment strategy you are following, it’s a good idea to check your savings regularly to make sure you are on track to meet your individual goals. If you need help or advice on any of the options available to you, we recommend that you speak to an authorised independent financial adviser.

Investing for the long-term

With your investment strategy in line with your goals, it might be a good idea to let time do the work. Try not to focus on short-term market fluctuations and instead, on the long-term potential growth of your investments.

Market volatility may be unnerving at times, but you should bear in mind that saving for retirement is a long-term journey. Over the years, markets have faced considerable challenges. In the long term, we have typically seen them rebound from periods of volatility. Do remember that past performance is not a guide to what will happen in the future.

An overview of investment strategies

A basic investment strategy can help you decide what approach is right for you. Remember, you don’t have to stick to the same strategy throughout your lifetime.

Whichever strategy you choose, it’s a good idea to check your savings regularly to make sure you are on track to meet your individual goals.

It’s important to remember that the value of investments can go down as well as up, so you may get back less than you invest.

A growth strategy
A balanced strategy
A conservative strategy

An overview of fund management styles

There are different ways funds can be managed: actively, passively or a combination of both, known as ‘blended’.

Passively managed funds try to match the average performance of a particular stock market index. There is no need for company analysis and the day-to-day decisions about which shares to buy and sell, as the fund will aim to hold the same proportion of shares that make up the market it’s tracking.

As there are no people involved in the selection of the shares, the charges on passive funds tend to be lower. Passive funds aim to match the market’s performance, not beat it. Choosing a passively managed fund means that you would rather not pay extra for the expertise of an active fund manager and you understand that you're not trying to go for an investment that outperforms a particular market.

Actively managed funds aim to produce above average performance. They are run by fund managers, who are responsible for choosing which investments to buy and sell. Each manager may have to keep within certain criteria, but within these, they choose which investments to hold.

The management charges of active funds tend to be higher than those of passive funds, as they have to cover the cost of researching companies, analysts and trading (the fund will likely make more changes than a tracker). By choosing an actively managed fund, you are paying a premium for the fund manager’s expertise and resources, in the hope that they will beat the performance of the index.

For example, in the case of an active fund, managers may hold a subset of funds in an index according to what they feel is appropriate.

At times funds employ elements of both passive and active management. For example, a fund manager may actively choose which asset class to invest in across a range of different assets but would use passive investment strategies within those asset classes.

Often these funds are multi-asset or diversified funds that invest in a range of asset classes such as equities, bonds, cash, property and commodities.

Want to change your investments?

Log in to PlanViewer to make changes to where you are invested.