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Introduction by Cherry Reynard
Generating a stable income in retirement is becoming more complex, just as there is increasing scrutiny on the way advisers generate that income for their clients. Complex markets have collided with the Consumer Duty, posing new challenges for advisers at this crucial point in their clients’ financial planning. The Consumer Duty brings a new focus on outcomes. It is not enough to have the right processes and procedures in place; those processes have to deliver the right outcome for clients. The regulator is about to become very interested in the questions advisers are asking their clients, how they judge suitability and how they build appropriate portfolios to deliver income in retirement. Part of the problem is there are so many moving parts in determining the right outcome. Is a client still working? Do they want to leave a legacy? What other assets do they hold? How much guaranteed income do they have? All these complex factors go into determining a client’s risk profile and building an appropriate portfolio. It also comes at a time when investment outcomes are becoming more difficult to predict. Judging likely outcomes based on recent history is unlikely to be fruitful. The post-Lehman Brothers environment of extraordinary monetary policy is at an end and will not return in the short term. This could see a reversal in all those assets that benefited from the era of free money. At the same time, investors need to contend with the impact on their investments of environmental, social and governance considerations. They must navigate a new geopolitical climate while also understanding the effect of new technology. There are new opportunities — from the yields available on fixed income to the promise of artificial intelligence — but financial market returns are unlikely to be as easily won over the next decade. It also means the work advisers do has never been more important. The potential for — and consequences of — poor planning is significant, but the value of getting it right is greater than ever. For clients, the impact is no less than life changing.
Interview: Mitesh Sheth
The BNY Mellon FutureLegacy 5 Fund
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Planning the journey
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Retirement income: A changing landscape
Feature
Retirement income portfolios: Key considerations
Interview
This is the time to not look in the rear -view mirror, says Mitesh Sheth, chief investment officer
Data
‘Complex markets have collided with the Consumer Duty, posing new challenges for advisers’
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Over the past decade, income options have been limited but strong financial market returns have given drawdown portfolios a significant tailwind. At the same time, low inflation has set an undemanding bar for income growth. Today the situation has flipped, with growth likely to be lower but income options more abundant. Advisers’ retirement income strategies will need to keep pace. In the post-Lehman Brothers environment, it made sense to have a growth-oriented strategy and, in general, income strategies played a diminished role in generating retirement income. Equity income strategies lagged the wider market, while bond yields dwindled to near zero. Many advisers abandoned ‘natural’ income strategies in favour of targeting capital growth. This proved the right strategy for the post-crisis environment, but there has been a sharp change over the past 18 months and advisers must contend with a new problem: inflation.
Retirement income a changing landscape
Inflation and higher interest rates have created fresh investment considerations for retirement advisers. Growth is likely to be lower but income options more abundant
‘Over the long run, it is likely that taking too little risk could mean missing out the most’
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This brings a fresh set of investment considerations. At the highest level, it may influence whether people access drawdown at all. Pension Bee director of public affairs Becky O’Connor says: “For many years, the drawdown option of being able to access amounts of money from a pension pot flexibly has made sense for the majority of people. “That’s because investment returns were relatively dependable and generally higher than you could get on cash savings or annuities, so keeping your pot in the markets and simply taking out what you need and when has generally been the default option. “But a rapid rise in interest rates, coupled with a rocky year for stockmarkets in 2022, has made the ‘right’ decision less clear cut. Higher interest rates give those approaching, and already in, retirement more options for how to access their retirement funds. Annuity rates have risen significantly in the past year, putting these back on the table as a viable option.” The Lang Cat director of public affairs Tom McPhail says the pandemic added another layer of complexity. “It prompted many to re-evaluate how and when they used their retirement savings. “Interest rate movements in the past 18 months have suddenly brought annuities back into fashion. Current regulatory scrutiny on defaults, the retirement advice process and consumer protection continue to keep advisers and providers alike from any risk of complacency around how they serve their customers,” he says.
Inflation
By Cherry Reynard
Where drawdown portfolios are the chosen option, this environment requires some re-evaluation of them. There are vastly more options available for income generation than there used to be. Quilter Investors portfolio manager Helen Bradshaw says: “The changing interest rate environment has very quickly broadened the opportunity set available for retirement income. Investors no longer need to work as hard to get higher yields and can get a good level of income in relatively safe assets.” Drawdown portfolios are already reflecting this change. Paul Flood, manager of the Newton Multi-Asset Income fund, says they had been underweight fixed income for most of the past decade, but have moved the allocation from around 12% up to 30% this year. This has mostly been in government and investment-grade bonds because of their diversification credentials. This has come at the expense of some alternative options, such as infrastructure and renewables. Flood says these have suffered from a rotation back into fixed income, and because of the costs disclosure regulation from the Financial Conduct Authority. Bradshaw says: “Developed market government bonds are looking more attractive and, as we reach the end of this interest rate hiking cycle, their ability to offer downside protection has increased; something that has been lacking for a number of years in the zero interest rate period.” However, despite this abundant choice the problem of inflation is pressing. Although it appears to be falling in the UK, it is still running at over 6%. Retirement income needs a sound inflation strategy. This argues for the inclusion of growth assets within a decumulation portfolio, but in a managed and careful way. Advisers must also consider the role of direct inflation hedging. Until recently, inflation-linked bonds looked poor value, but they underwent a significant adjustment in 2022 and now offer a real yield again. The selection of growth assets has become more complicated. Robeco’s research, Expected Returns 2024-2028: Triple Power Play, shows the equity risk premium is low relative to history for developed markets, but high relative to history for emerging markets. Investors must contend with the impact of environmental, social and governance considerations on the valuation of assets, while also looking at the implications of technological advancements such as artificial intelligence. There are also new geopolitical risks to navigate. At the same time, equity income strategies may find greater favour with investors today, as they start to prefer the more tangible returns of dividends and predictable cash generation over the less predictable charms of capital growth. Equally, there are other reasons to hold income-generating assets beyond the fact they generate an income. They don’t tend to fall as much in a market downturn, for example, and can offer more stable returns than those of growth equities. This can help advisers with the conundrum of managing downside risk with the necessity of inflation protection.
Re-evaluation
Flexibility
Flood believes flexibility is key to managing a challenging and unpredictable climate. “We want to be agile, with the ability to increase exposure to more cyclical areas, such as semiconductors, at the right point in the cycle. We want to include structural growth areas, where dividends may be lower but growth in the income may be higher. “We also want to use behavioural biases to our advantage, moving capital from high-performing areas to less high-performing areas. And we need to be forward looking because the past will be a poor guide to the opportunities from here.” This also means cash is not a long-term solution. Bradshaw says: “Many people have been simply sitting in cash, given the optically appealing rates on offer, but this is the easiest way to lose money over the long term, thanks to inflation. “Also, if you sit in cash you are particularly exposed to re-investment risk and, as rates begin to be cut, cash deposit returns will go down immediately. Meanwhile, stock and bond markets are likely to rally. “So, over the long run, it is likely that taking too little risk could mean missing out the most.”
‘We need to be forward looking because the past will be a poor guide to the opportunities from here’
Interview: Richard Parkin
Advisers always play a crucial role in their clients’ wellbeing but the decisions they make on their behalf at retirement are particularly impactful. Get it right and clients can enjoy the retirement they’ve always wanted; get it wrong and the consequences are grim. With new Consumer Duty rules in place and increasing scrutiny of advisers’ decision making around retirement income, what factors need to be reflected when building a client’s portfolio? Consumer Duty rules put the emphasis on delivering suitable outcomes for clients. This is a break with the previous rules that put the emphasis on having the right processes and procedures. At the same time, it means advisers will have to deliver suitable outcomes for a client depending on their needs, rather than outcomes that simply reflect their wishes. This will entail a more forensic appreciation of a client’s needs and ambitions. Above all, it will require listening to clients and understanding their goals. This is a vital first step towards achieving the best customer outcomes.
Retirement income portfolios Key considerations
With client outcomes about to receive a lot more scrutiny, advisers will need to have thought of everything
‘None of this is simple and it is far from being a once-and-done exercise’
Universal questions
The Lang Cat director of public affairs Tom McPhail says there are some universal questions everyone needs to consider as they approach retirement. He lists them: “When they want to start drawing an income; how much capital they might need to draw as a lump sum; whether they want a secure regular income; whether they want flexible access to their pension savings; their tolerance to fluctuations in their income and their willingness to carry investment risk in retirement; and how often they might review their income arrangements in between enjoying their retirement.” In getting the answers to those questions, advisers require clear information on a number of non-pension matters. These include their state of health, their non-pension savings, their property situation, the needs and expectations of their family and dependents, any responsibilities they may have to others, their spouse’s circumstances, their savings, and whether they have made a will and a power of attorney. McPhail adds: “None of this is simple and it is far from a once-and-done exercise. For most people, retirement is an evolving process rather than a one-off transition.”
Every answer will have an investment consequence and may bring a client to a slightly different place. Pension Bee director of public affairs Becky O’Connor points out: “People need to know what the returns are likely to be for the options they are considering. “Older retirees and those in poorer health tend to get better annuity rates, so may be less tempted to stay in the stockmarket if the rates on offer are particularly attractive.” Equally, someone’s state of health may affect the extent to which they need to leave cash in investments for care needs. The amount of income they have from other sources, such as buy-to-let property or Isas, will also influence their appetite for risk. If they have guaranteed income from elsewhere, it may mean they can tolerate some variability in the level of their income. It can also affect how confident they feel about managing a pension pot through drawdown more generally. O’Connor admits: “It can sometimes seem like a big responsibility — particularly in volatile times. “It won’t necessarily suit every client.” If they want to leave an inheritance, this will be a tick for leaving some of their pot invested. O’Connor says, if this is the case — and where possible — it can make sense to tap in to other sources of wealth before drawing on a pension pot.
Investment consequences
Decumulation advice: Why it is under scrutiny
Investing for retirement income is different from an accumulation strategy, says BNY Mellon's Richard Parkin
Each option will also have tax implications, which may prove every bit as important to a client’s overall retirement income as their investment choices. O’Connor says: “Whether someone is still working and earning is a vital consideration. Pension income is taxable, so thinking about how much tax will be payable in different scenarios is important.” There will undoubtedly be complexities around establishing whether someone has achieved the right investment outcome based on the parameters that were set. Advisers are unlikely to be penalised for poor market returns, but they could be if a strategy isn’t appropriate to a client’s needs. Perhaps it is insufficiently diversified, for example, or holds too much in bonds or cash when a client needs growth in their income. Advisers will need to be strategic. Tillit chartered wealth manager Gabriella Macari says: “It is better to plan asset allocation first, based on a client’s risk capacity, risk tolerance and long-term objectives, than to blindly seek income without consideration for overall balance and diversification.”
Tax implications
Advisers will also have to consider the role that annuities will play. With annuity rates rising, there is a far higher bar for other income sources. Advisers may need to show they have not chosen drawdown when an annuity might have given an investor a better result. Annuities are suddenly popular again, observes McPhail. “It will be interesting to see whether that popularity endures now inflation is falling back and we appear to be reaching the peak of the current interest rate raising efforts by the Bank of England,” he says. “The Department for Work & Pensions has become very excited of late by the idea of collective defined contribution [CDC] schemes for decumulation, even though the concept remains largely unproven in the UK. “Maybe we’re about to see investment annuities, which behave in much the same way as CDC, make a comeback.”
Role of annuities
Many advisers will already be taking all these factors into consideration for their clients, asking the right questions and delivering appropriate outcomes for their needs. However, those outcomes are about to come under a lot more scrutiny. Advisers will need to have turned over every stone and thought of all eventualities.
All eventualities
Q&A: Ed Harrold
More than ever this is the time to not look in the rear-view mirror
Fixed income investment director, Capital Group
Geopolitics has become more fractured and fractious. Not only has the world had to contend with the disruption to energy markets created by the war in’ Ukraine, but it has also had to adjust to growing tensions between the US and China. This is on top of a technology revolution that is seeing artificial intelligence reshape the corporate landscape. Sheth sees this as a profound shift for investors. He says: “It is a very different macro regime from the past 40 years and maybe one we’ve never seen before. We’ve moved away from an environment of low interest rates, low inflation, strong liquidity and loose credit conditions to something much more volatile.” He believes many retirement income strategies are ill prepared for this change. They rely too heavily on market beta, do not employ the dynamic asset allocation necessary to be responsive to a changing world, and are not looking at whether the assets in which they invest are truly sustainable. “The models are often based on backward-looking data and should not be guiding how assets are allocated, how risk is managed or where income is generated. This is, more than ever, the time to not look in the rear-view mirror. It takes time to put aside that history and look at markets afresh, and look with new data and new perspectives.”
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A multi-decade trend of globalisation is in reverse and many retirement income strategies are not prepared, says Mitesh Sheth. But Newton’s agile multi-asset franchise aims to respond to a changing environment
It is 15 years since the financial crisis wrought its destructive effect on markets and economies across the globe. The extraordinary measures taken by governments to protect the financial system created a unique environment for investors, one where financial returns came relatively easily. But the regime is changing and those looking to build a safe and secure retirement portfolio should take note, says Mitesh Sheth, chief investment officer at Newton’s multi-asset business. The period since the financial crisis has seen beta do the heavy lifting in portfolios. It has been right to take risk, and investors holding a straightforward combination of an S&P tracker and a government bond portfolio have seen their portfolios grow. However, this benign period came to an end in 2022 as inflationary pressures forced central banks to raise rates and halt quantitative easing. The tools that had artificially suppressed financial market volatility for more than a decade were withdrawn. Rising interest rates were disruptive in themselves but this came at a time when other factors started to weigh on markets. For example, the risks surrounding corporate environmental and social behaviour became more apparent, with an increasing focus on the use of natural resources. The fallout from the pandemic has been profound, with companies reorganising supply chains from ‘just in time’ to ‘just in case’. This is reversing a multi-decade trend of globalisation as countries strive to re-shore production and inventories for greater security.
Retirement income
This requires a new look to retirement income as well. In an era of low interest rates, advisers faced a stark choice: take more risk to achieve the same level of income, or target capital growth and take an income from the proceeds? Taking more risk proved the right strategy for the post-crisis environment, but advisers must now contend with a new problem – inflation. There may be more options for income, but that income needs to grow ahead of inflation. There are other concerns too. Income must be sustainable over the long term. This is more difficult when there are a wider range of outcomes and a raft of new risks. Sheth says: “In the past 20 years, companies haven’t been as interested in dividends because they were reinvesting for growth. It’s been a very growth-focused market. “As we look forward, we see we’re in a very different market environment, where we don’t see the same capital appreciation in assets, whether equities, bonds or alternatives. Alternatives and private assets have also benefited from benign market conditions.” With bonds paying 5% to 7%, the temptation is to just gather income from a mix of fixed-income options, but Newton’s multi-asset team expects the environment to become more volatile and credit conditions to worsen. This could prompt more defaults. Sheth adds: “Rather than going down the credit spectrum, investors have got to be more selective and dynamic; at the moment, more to sovereign bonds than to investment grade and high yield. Higher yield and higher income represent higher risk at this moment.” In contrast, the team is quite optimistic on equity income. He says: “We believe, as we come through a recession, investors will seek refuge in solid companies that pay dividends and show dividend growth. Company dividends are real, inflation-busting assets. “We do believe there is income to be earned in bonds and equities, but it needs to be done more dynamically and it requires a more agile approach.” He also believes investors need to be cautious on using alternatives. While these are appropriate for some investors, they are not a panacea and areas such as real estate and some private assets could come under pressure. Income investors need to be alert to new risks.
‘It is a very different macro regime from the past 40 years and maybe one we’ve never seen before’
Inflation protection
This has required a more nuanced and sophisticated approach to decumulation. It also calls for a greater awareness of inflation protection. Parkin says retirees are now demanding more from their retirement savings. “Everyone is feeling the cost-of-living crisis, even if they are wealthy,” he adds. “The recent shift in environment has made guaranteed income more attractive, including sticking money on deposit. Advisers are increasingly seeing clients who would rather take the 5%-plus return on a cash Isa over the volatility of a stock portfolio, even if it comes with inflationary risks.” Advisers have a crucial role in stressing the importance of inflation protection, with inflation likely to be structurally higher from here. Parkin says, above all, any decumulation strategy needs to recognise that investing for retirement income is different from an accumulation strategy. “The question is not, ‘How do I maximise my return?’ but more, ‘What are my objectives? What is the proper balance between risk and reward?’”
‘We’ve got to be agile and learn quickly’
Future fit
How can investors ensure their retirement portfolios are structured to respond to this environment? Newton had been running multi-asset portfolios for decades, particularly for UK advisers. It has built a broad range of multi-asset strategies – including balanced, growth, diversified and income options. They are all dynamic in their asset allocation, backed by long-term thematic analysis. Sheth has aimed to shore up the values on which the franchise was built since he joined the business in 2022, believing they will keep it fit for this new environment. His work has been in evolution, rather than revolution. For example, he wanted to ensure the group continued to be able to draw on diverse talents. “Have we got different brains contributing to solving the problem?” He adds: “We believe we are in a market regime we haven’t seen before. Our living memory and our model memories don’t go back that far to a relevant period of analysis. That means we’ve got to be agile and learn quickly. “When you’re trying to ascertain truth in the dark, you’ve got to look at it through multiple perspectives. “I spent time researching hundreds of fund managers around the world before I came to Newton. Most of them work in silos, so an equity analyst doesn’t talk to a credit analyst. A bottom-up person rarely engages with a quantitative person. A quant person rarely engages with a non-quant person. An ESG [environmental, social and governance] person rarely gets enough respect and time from a non-ESG person, and so on. Even within that, a financials analyst tends not to know much about industrials. “We organised our research not around industry sectors but more in pods of companies that behave similarly (like interest rate sensitive stocks, or cyclical growth stocks, etc). “We’ve organised our research team to bring together equity, credit, micro, macro, quant and fundamentals, and to integrate ESG. “We call it our multi-dimensional research platform, and it is what differentiates us as a business. We’ve deliberately designed it to deliver the kind of forward-looking macro and micro insights we need for the environment we’re in.”
Consumer Duty
The complexity of retirement advice is also being increased by the regulatory landscape. Parkin says it is becoming clearer how the FCA will apply the Consumer Duty to this sector. He says the regulator has been explicit that its current Thematic Review of Retirement Income Advice will be an important indicator of how well advisers are implementing the new rules. The review findings are due at the end of this year and, in the meantime, firms should consider how their retirement advice proposition could be viewed by regulators, says Parkin. The new market environment may expose strategies that are no longer fit for purpose. He adds: “It’s vital this change of environment is recognised by the FCA and it understands how firms are adapting their advice approaches to accommodate this. In the context of the Consumer Duty, retirement advice is — on the whole — pretty good. However, there will be some things advisers need to look at. They have been operating in a benign environment and everyone has been happy, but this has shifted over the past 18 months.” He is hopeful advisers will arrive, finally, at a model that offers a measure of guaranteed income and downside protection, along with some upside potential from stockmarkets. This, he says, was the model initially envisaged by the regulator and is likely to be the most robust model for the long term.
In practice
All Newton’s multi-asset funds have three governing principles: they are global, they are dynamic and they fully integrate ESG. Many of its competitors have focused on passive options. Sheth believes this is unlikely to be the right step for the complex environment in which investment managers are operating today. Even where managers are active, often they have a static asset allocation, even when the risk inherent in individual asset classes changes significantly. Equally, Sheth believes many groups pay only lip service to sustainability. “Alongside de-globalisation and divergence, we think de-carbonisation is one of the key things that will drive markets in the coming decades. Investing with a horizon of a decade or more, you need to invest in the most sustainable companies in the world that are helping us transition to a net-zero low-carbon future.” It is also a vital risk management factor. Rather than outsource the selection of individual assets to the different teams in the company, all the funds have a single, concentrated portfolio of stocks. The result is more agile strategies that can be responsive to a changing environment. Newton continues to adapt its funds to the prevailing environment. Its FutureLegacy range, for example, acknowledges that a fully unconstrained multi-asset model is difficult to adapt to advisers’ risk-rating systems. This launched six months ago and, while each fund in the five-strong range is more constrained than the group’s other funds, they retain considerable flexibility to move around within their allotted risk bucket. The funds are independently assessed through Dynamic Planner. This is a new environment. The retirement strategies that have served investors well since the financial crisis are unlikely to repeat the same feat over the next decade. Portfolios will need to be agile and global, with an eye on true sustainability. These are the principles on which the Newton multi-asset franchise has been built.
The decumulation strategy of the future
‘Rather than going down the credit spectrum, investors have got to be more selective and dynamic’
BNY Mellon FutureLegacy 5 Fund
6 members (3 independent)
Income has returned to fixed income
Over 100 years of combined investment experience
46 meetings held
3 strategic asset allocation changes
For professional clients only, not suitable for retail investors. The views expressed are the contributor’s own and do not constitute investment advice.
Why the global high income opportunities strategy?
FOR PROFESSIONAL clients ONLY
Newton is a global investment management firm, founded in 1978 and owned by BNY Mellon. Our purpose is to improve people’s lives through active, thematic and engaged investment which strives to deliver attractive outcomes to our clients and helps foster a healthy and vibrant world for all.
Past results are not a guarantee of future results.
All information and opinions in this document are as at 31 December 2022 and attributed to Capital Group, unless otherwise stated. In US$ terms. High yield, EM hard currency sovereign, EM local currency sovereign and EM corporates as represented by the Bloomberg US High Yield 2% Issuer Cap Index, JPMorgan EMBI Global Index, JPMorgan GBI-EM Global Diversified Index and JPMorgan CEMBI Broad Diversified Index respectively. Yields are yield-to-worst. EM: emerging market. Source: Bloomberg
-1.6 13.7 9.8 1.7 -11.5
60%
We have been managing fixed income assets for 49 years. Our distinctive investment approach, with analysts empowered to invest alongside portfolio managers, is driven by rigorous company research and a long-term perspective. Reflecting investor confidence in our fixed income capabilities, Capital Group's fixed income assets under management have grown more than 110% from 2015 to 2021.
Investing for our futures, creating a powerful legacy
Inception date: 07/02/2023
target equity allocation 60%
The investment company
AUM: £86.9Bn
Investment & stewardship policy universe median:
Fixed income SSA universe median:
50%
Fixed income corporate universe median:
62%
5/5
&
94%
4/5
88%
78%
Listed equity active fundamental incorporation universe median:
71%
Listed equity active fundamental voting universe median:
54%
The philosophy
The BNY Mellon FutureLegacy Fund is one of a range of five risk-targeted Multi-Asset portfolios that through the expertise at Newton Investment Management aim to help clients achieve their long-term goals investing for and during their retirement.
Why choose this strategy?
The BNY Mellon FutureLegacy 5 Fund is a multi-asset fund risk managed to Dynamic Planner volatility band 5, enabling advisers to recommend a solution which aims to meet the needs, risk appetite and expectations of their client, identified as part of their advice process:
Actively managed by a dedicated team at Newton to manage volatility and take advantage of timely investment opportunities, drawing on the best ideas and expertise across the firm
Global & Sustainable, the fund looks to invest globally for a fully diversified approach regardless of geography or sector, drawing on Newton’s established sustainable framework to select investments which support a lower carbon transition and a fairer society
Directly invested – providing investment flexibility to seek out opportunities to invest as well as transparency in costs and environmental, social and governance (ESG) risk reporting
the best of Newton’s Sustainable Asset Management skills
Equity
100%
Key investment risks
Objective/Performance Risk: There is no guarantee that the Fund will achieve its objectives.
Currency Risk: This Fund invests in international markets which means it is exposed to changes in currency rates which could affect the value of the Fund.
Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices.
Sustainable Funds Risk: The Fund follows a sustainable investment approach, which may cause it to perform differently than funds that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The Fund will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
To achieve capital growth and potential for income over the long term (5 years or more) while being managed to a pre-defined level of risk. The Fund will aim to maintain a risk profile classification of 5 from a scale of 1 (lowest) to 10 (highest) which is assessed against the risk ratings scale provided by an external third-party risk rating agency.
OBJECTIVE
This Fund is actively managed without benchmark-related constraints. The Fund uses a composite index, comprising 5% SONIA GBP, 35% BAML Global Broad Index GBP Hedged and 60% MSCI ACWI GBP NR as a point of reference (comparator) against which the ACD invites Shareholders to compare the Fund’s performance. The ACD considers the composite index to be an appropriate comparator because it includes a broad representation of the asset classes, sectors and geographical areas in which the Fund predominantly invests.
BENCHMARK
The BNY Mellon FutureLegacy 5 Fund is actively managed typically by using forward-looking expectations of volatility. In doing so, the Investment Manager uses its own internal risk model, whilst also considering external independent risk profiling methodologies. Based on a risk profile scale of 1 (lowest) to 10 (highest), this fund targets a risk profile of 5 but this is not guaranteed. This risk profile is not the same as the risk and reward category shown in the fund’s Key Investor Information Document(s). The risk profile of the fund is currently assessed against the risk ratings scale provided by Dynamic Planner, but is subject to change at the ACD’s discretion. Source: Newton, 28 February 2023. Pie charts illustrate the breakdown of equities and bonds by region/market. Source for Ratings: BNY Mellon as at 30 June 2023. Ratings are for illustrative purposes only and should not be relied upon when making an investment decision. Dynamic Planner Risk Ratings should not be used for making an investment decision and it does not constitute a recommendation or advice in the selection of a specific investment or class of investments. Dynamic Planner’s risk-profiling process is driven by rigorous analysis of the underlying asset mix of a fund, as well as considering factors such as the flexibility of the investment mandate, monthly trend analysis of the underlying asset constituents and observed performance. Once this analysis is complete, the data is calibrated to the underlying asset forecast assumptions of the Dynamic Planner model. The expected risk of the fund is then determined using a scale from 1 (lowest) to 10 (highest) which can then be aligned to client risk profiles. 1. 2.
Source: Newton as at 30 June 2023.
Source: 2021 Principles for Responsible Investment report. The rating was given by UN PRI to Newton Investment Management Limited on 18 August 2022 relating to the period of 1 January to 31 December 2020.
The value of investments can fall. Investors may not get back the amount invested. Income from investment can vary and is not guaranteed.
IMPORTANT INFORMATION
For Professional Clients only. This is a financial promotion. Please refer to the prospectus and the KIID before making any investment decisions. Go to www.bnymellonim.com. For a full list of risks applicable to this fund, please refer to the Prospectus or other offering documents.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and its subsidiaries. The Fund is a sub-fund of BNY Mellon Investment Funds, an open-ended investment company with variable capital (ICVC) with limited liability between sub-funds. Incorporated in England and Wales: registered number IC27. The Authorised Corporate Director (ACD) is BNY Mellon Fund Managers Limited (BNY MFM), incorporated in England and Wales: No. 1998251. Registered address: BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Authorised and regulated by the Financial Conduct Authority. Assets under management (AUM) relates to the combined assets managed by the Newton Investment Management group. From 1 September 2021, Newton group of companies includes Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA).
Issued in the UK by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority. Document ID: 1548979. EXP: 31 December 2023. T11876 09/23.
TARGET VOLATILITY BAND
Terms of Service ‘Money Marketing’ is owned and operated by Metropolis Financial Platforms Ltd, a company registered in England and Wales (company number 06439194) with its registered office at 7th Floor, Vantage London, Great West Road, Brentford, England TW8 9AG. All references to “We”, “Us” and “MFP” below are to Metropolis Financial Platforms Ltd. These Terms govern your use of the Content (as defined) below and our liability in relation to the Content. 1. Intellectual Property Rights 1.1—We are the owner or licensee of all copyright, trademarks, designs and other intellectual property rights that may subsist in these works (including all information, data and graphics in them) (the “Content”). We shall retain ownership of the Content at all times, and the publication of this Content does not operate to transfer any new or existing intellectual property rights that may subsist in the Content away from MFP. 1.2—Parts of the Content may be jointly developed by MFP and our commercial sponsor, and such jointly developed Content is ultimately owned by our commercial sponsor. These Terms apply equally to Content owned by our commercial sponsor and Content owned by Us. 1.3—You must not copy, reproduce, modify, create derivative works from, transmit, distribute, publish, summarise, adapt, paraphrase or otherwise publicly display any Content in any manner whatsoever, whether by manual or automated means, without the prior written consent of MFP. 1.4—Under no circumstance is MFP Content to be used in the course of any trade, business, craft, profession or any other commercial activity. 2. Provision of Content to You 2.1—This Content is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of this Content. 2.2—Although we make reasonable efforts to update Content, we make no representations, warranties or guarantees, whether express or implied, that this Content is accurate, complete or up to date. 2.3—Any opinions, analysis or ratings provided in MFP Content are as understood by MFP and our commercial sponsor and their group companies at the date they are published and are not recommendations to purchase, hold or sell any investment or to make any investment decision. This Content does not purport to assess the suitability of any investment for any specific purposes or requirements and should not be relied upon as the basis of any investment decision. 2.4—You acknowledge that persons who do not have professional experience in participating in unregulated collective investment schemes should not rely on material relating to such schemes and past performance of investments is not necessarily a guide to future performance. Prices of investments may fall as well as rise. 3. Exclusion of Warranty 3.1—We are not liable for the Content being up to date, accurate or complete. 3.2—You acknowledge and agree that the Content is provided on an “as is” and “as available” basis, without representation or endorsement of any kind, and is obtained at your own risk. 3.3—MFP excludes all representations, warranties, conditions or other terms whether express or implied (by statute common law collaterally or otherwise) in relation to the Content to the maximum extent permitted by law, including without limitation any implied warranties as to satisfactory quality and/or fitness for purpose. 4. Our Liability 4.1—We will not be liable in contract, tort (including negligence) or otherwise for any liability, damage, loss, penalties, expenses or costs (including legal and other professional costs) (whether direct, indirect, consequential, special or otherwise) incurred or suffered by you or any third party in connection with this Content or in connection with the use of MFP Content, save for any liability for fraudulent misrepresentation or for death or personal injury arising from MFP’s negligence. 4.2—If you are a consumer, nothing in these Terms will affect your legal rights under English law. 5. Law and Jurisdiction These Terms are governed by and shall be construed with the laws of England and Wales, and the Courts of England and Wales shall have exclusive jurisdiction in respect of any dispute in connection with the Content or with these Terms.
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