We’re making some changes to our Universal Balanced Collection (UBC). The UBC is available to investors in Aegon Retirement Choices (ARC), One Retirement (AOR) and our insured Pension fund ranges.
The changes we’re making
The UBC currently invests in six funds (called the fund holdings), and we’re changing these.
We’re removing some funds from the UBC, and changing some of the other funds that the UBC invests in.
In line with the fund objective, we reserve the right to add, remove and replace funds within the UBC with the aim of making sure it continues to meet its aims and objectives. The fund objective explains how the fund invests and what it’s trying to achieve for investors.
The changes will happen in two stages. We’re aiming for stage one to be completed by the beginning of November 2024. We expect stage two, where we’ll make further changes, to happen around the middle of 2025. Details of the changes for stage two will be communicated nearer the time.
When we make these changes, there will be a small increase to additional expenses. Additional expenses are on top of the annual management charge (AMC). Together they form part of the ‘Total Charge¹’ for pension and life funds, and the ‘Fund Charge2’ for Aegon Retirement Choices (ARC) and Aegon One Retirement (AOR) funds.
1 This includes a standard 1% product charge, a fixed management fee and expenses that vary with the day-to-day costs of running the fund. Expenses can include costs paid by Aegon to third parties. Investors may pay a different product charge, in which case the Total Charge will be different.
2 This is on top of any product or adviser charge and includes a fixed management fee, plus expenses that vary with the day-to-day costs of running the fund. Expenses can include costs paid by Aegon to third parties.
What’s not changing
There will be no change to the fund objective, benchmark and Aegon risk rating of the UBC fund.
The funds that are changing
The funds included in these changes are:
Pension
- Universal Balanced Collection
- Universal Lifestyle Collection
- Universal Balanced Collection (Annuity Target)
- Universal Balanced Collection (Flexible Target)
ARC
- Universal Balanced Collection (ARC)
- Universal Lifestyle Collection (ARC)
- Universal Balanced Collection (Annuity Target) ARC
- Universal Balanced Collection (Flexible Target) ARC
This also includes all lifestyle year variants of these funds. If you’re in a lifestyle fund, you will have a year after the fund name. This number indicates the year you’re set to retire in, and you can find more information about this on our website.
Our life versions of the funds will not change.
You can find more information about these funds in the fund factsheets on the ‘Fund prices and performance’ page of our website by selecting ‘Other fund ranges’ ‘Aegon Retirement Choices (ARC)’ or ‘One Retirement’ and searching for the fund name.
Why we’re making these changes
We’re making these changes to help the UBC meet its objectives and target improved outcomes for our customers. The changes aim to improve returns, increase diversification, enhance how Environmental, Social and Governance (ESG) considerations are used, and provide access to investment opportunities such as private markets. However, there’s no guarantee the funds will meet their objectives. The value of an investment can fall as well as rise and isn’t guaranteed. The value of your pension pot when you come to take benefits may be less than has been paid in.
The UBC will invest in funds which hold a small amount in private market investments. Private markets are investments that aren’t listed or traded publicly. They are ‘illiquid’. This means they may take longer to sell than traditional investments or sell for less than they are worth. Private market assets are considered long-term investments of at least 5 years.
We’ll work with the underlying fund managers to monitor how much the UBC holds in private markets to make sure that it doesn’t become too high. If it does, we’ll sell some. We may also sell if markets become volatile or when we see large numbers of investors moving out of the UBC.
In extreme conditions this could lead to payments from the UBC being temporarily stopped (deferred). For more information on the potential impact of illiquid investments and to understand deferrals of payment (payments out) investors should speak to a financial adviser. There may be a cost for this. Investors can also find information on deferrals in their policy terms and conditions. Please note that these are subject to change.
More information about the changes we’re making
There’s more detail on the fund changes in the tables below:
Current UBC asset allocation (as at 30 June 2024)
Fund holdings |
Allocation (how much of the UBC is invested in this fund) |
|---|---|
Aegon Diversified |
70.5% |
Aegon AM Asset Allocator |
19.0% |
Aegon BNY Mellon Balanced Managed |
3.6% |
Aegon BlackRock Balanced Managed |
3.4% |
Aegon Baillie Gifford Balanced Managed |
2.9% |
Aegon AM Global Sustainable Sovereign Bond |
0.6% |
Total |
100% |
Source: Aegon UK
New UBC asset allocation (from September 2024)
Fund holdings |
Allocation (how much of the UBC is invested in this fund) |
|---|---|
Aegon Diversified |
81.0% |
Aegon BlackRock World ESG Insights Equity Fund |
12.1% |
Aegon AAM Multi Asset Credit |
6.9% |
Total |
100% |
Source: Aegon UK
More details on the changes to the funds
Aegon Diversified fund
The Aegon Diversified fund will now include investment in private markets (over the long-term we expect the level of investment to be around 5%).
The fund will still mainly invest in passive funds after the updates are made.
Passive funds aim to match the performance of a benchmark index or fund by investing in the same assets to the same proportions as the index.
A benchmark is used to measure a fund’s performance against similar types of investments, similar markets or regions.
Aegon BlackRock ESG Insights World Equity fund
The Aegon BlackRock ESG Insights World Equity fund will be added into the UBC. The fund is a passive fund which aims to match the performance of a benchmark index.
Aegon Asset Management Multi Asset Credit fund
The Aegon Asset Management Asset Allocator fund will be updated to be called the Aegon Asset Management Multi Asset Credit fund. The asset allocation of this fund will be updated to only invest in fixed income strategies. As a result of this the name is changing to better reflect how the fund invests.
Fixed income investments, or bonds, are generally considered a lower-risk investment than company shares. Bonds are issued by governments, local authorities or companies to raise money. They’re typically issued for a fixed period, during which investors are usually paid interest.
Removal of funds
During September 2024, the following funds were removed from the UBC:
- Aegon Baillie Gifford Balanced Managed
- Aegon BNY Mellon Balanced Managed
- Aegon BlackRock Balanced Managed
We’ll update our literature and our website as soon as we can, but investors may notice the old and new information in use for a time (for example on our fund factsheets).
What current investors need to do
Existing investors don’t need to do anything, the changes will happen automatically. Please speak to a financial adviser if you’re not sure what these changes mean for you. There may be a cost for this. If you don’t have a financial adviser, you can visit moneyhelper.org.uk/choosing-a-financial-adviser
If your personal circumstances mean you need any additional support or if you’d like a large print, Braille or audio version of this document, please visit aegon.co.uk/additionalsupport