NTUC Income yesterday launched their Aim Series of funds, a collaboration between them and Schroders Asset Management.
The Aim Series of funds aims to take away the complexity of investment from the consumer, by offering a choice of 5 life cycle funds:
The funds will invest in a mix of equities, bonds and other assets such as commodities and property.
Essentially, you will just need to select the fund that fits the target year when you need it. For example, someone who plans to retire in the year 2035 can simply invest in the Aim 2035 fund.
The fund manager will manually adjust the asset allocation of the underlying assets of the funds at different points of time so that the risk of the portfolio gets lesser as it approaches the target year.
While there are currently a few other life cycle funds in the market right now, how the Aim series is different is that the fund manager (Schroders) will also adjust the asset allocation according to the market cycle.
Depending on their views of whether it is an economic slowdown, recession, recovery or expansion, they will overweight or underweight specific sectors accordingly. If the fund manager can perform this role well, it will deliver extra returns to the fund compared to a normal life cycle fund.
For the Aim Now fund, it will target to return a distribution of 4% every year.
The Aim series of funds will be available on NTUC’s newly launched Investment-Linked insurance products (ILP), VivoLink and GrowthLink. More on the cost structure of VivoLink and GrowthLink in a later post.