A gripping five-year performance

25 September 2017

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Our Governed Retirement Investment Portfolios (GRIPs) reach their five-year milestone, and prove their resilience in challenging market conditions.

Five years of resilience

Designed exclusively for customers looking to take a sustainable income from their pension, the GRIPs have shown resilience in challenging market conditions.

They’ve coped with the ups and downs of market behaviour such as China devaluations, Brexit and the US elections, and outperformed their respective benchmark - delivering an average return of between 5.6 and 10.7% per annum. *

More gripping than guaranteed investments?

Launched in 2012, the GRIPs were one of the first centralised investment proposition (CIP) designed exclusively for customers looking to take sustainable income from their pension.

Five years on, there are still only a small number of multi asset portfolios designed specifically for the pension decumulation market. And one of the FCA’s key concerns is that product innovation has been limited to date, particularly for the mass market.

Every retiree will have different preferences for income, security, flexibility and value for money and these preferences will change over time. So finding a solution that fits all your clients is unlikely. For example, smoothed funds tend to have higher charges and limited upside which can reduce the amount of income the client gets over their retirement. GRIPs are a good option for drawdown customers who are looking to capture market upside, whilst also looking for a solution that can cope with downside market risk events.

You can read a  review of the UK retirement income market produced by Milliman, to understand how well different products meet the income requirements for different example customers. 

A gripping future

We now have a five-year proven track record in good performance, governance and risk management for the GRIPs. But there’s always room for improvement.

Royal London Asset Management (RLAM) will continue to manage the GRIPs within a tightly controlled risk framework and we will continue to review the asset allocations each quarter- to ensure each portfolio is on target to achieve its particular level of risk and income.

Here’s to another gripping five years.

 

*Source: Lipper, 29/08/2017

Past performance is not a guide to the future. Prices can go down as well as up. Investment returns may fluctuate and are not guaranteed so you could get back less than the amount paid in. GRIP returns are net of 1.00%.

About the author

Lorna Blyth

Investment Strategy Manager 

Lorna is responsible for the the ongoing promotion and development of Royal London's investment proposition. She holds the IMC qualification and a Masters in Investment Science.

Last updated: 25 Sep 2017

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.