An Investment Strategy is when your AVC is invested in a selection of funds chosen by experts, based on your own individual attitude to risk and desired return. Investment strategies remove the need for you to actively manage your investment in your AVC Plan as the strategy will move your AVC into “safer” funds as you approach your retirement date. In most cases, you have three Investment Strategies to choose from:

• Cautious Strategy
• Balanced Strategy
• Adventurous Strategy

Depending on which strategy you choose, your AVC is invested in the relevant fund i.e the Adventurous Public Sector Fund for the ‘Adventurous’ investor.

Cornmarket consultants use specially designed software which provides a detailed risk/reward analysis designed to determine your investment objectives and tolerance to risk. The goal is to ensure that the investment strategy adopted by you most accurately reflects your risk/reward profile. However, if you would prefer to choose a strategy yourself, you can do so. It may be helpful to read the below statement and choose which one best applies to you. This will give you an indication on what investment strategy might suit you best.

1. Cautious Strategy:

“Preserving the value of my contributions is important but I would like to see some modest growth on my investment and if possible match or even beat inflation. I understand that my returns will fluctuate from year to year and that I may have to accept returns which are at times less than inflation (or even negative) given the fact that there is a reduced risk of my savings falling in value. Nonetheless I accept that there is the possibility of some falls in the value of my contributions – perhaps even to levels below the original amount I have invested. I am happy to save regularly for a period of at least 5 years (ideally 7-10 years or more) as I appreciate that the longer I save, the greater the potential for modest returns over the lifetime of my AVC with less possibility of any of my investment being worth less than my contributions.” If this applies to you, a cautious investment approach may be the best option. This approach provides the potential for modest returns with a low to medium risk level.

2. Balanced Strategy:  “I would like to see a reasonable ‘real’ return, i.e. after inflation, on my contributions over the years. I understand that, in order to help achieve this goal, returns on my investment will fluctuate, perhaps materially, from year to year. I accept that there is the possibility that in some years, returns may be negative, with the possibility of falls in the value of my contributions to levels somewhat below the original amount I have invested. I am happy to save regularly for a period of at least 7-10 years or more. Because I appreciate the longer I save, the greater the potential for reasonable returns over the lifetime of my AVC – with less possibility of any extended fall in the value of my contributions.” If this applies to you, a balanced investment approach may be the best option for you. A balanced investment approach provides the potential for better returns and involves a medium to high level of risk.

3 . Adventurous Strategy: “I want the best potential for growth on my contributions as I am aiming for good ‘real’ returns i.e. after inflation. As a result I am willing to tolerate the fact that there may be significant fluctuations in my returns from year to year. I also understand that in some years returns may be negative (perhaps even considerably so) and that there is the possibility of falls in the value of my contributions to levels well below the original amount I have invested. I am happy to save regularly for a period of at least 7-10 years or more. Because I appreciate that the longer I save, the greater the potential for good returns over the lifetime of my AVC with less possibility of any lengthy fall in the value of my contributions.” If this applies to you, an adventurous investment approach may be the best option for you. An adventurous investment approach provides the potential for best returns but involves the highest level of risk.

You have the option to select the individual fund(s) that your AVC is invested in i.e all decisions about which funds your AVCs are invested in will be your responsibility. This means that it is especially vital that, as you approach retirement, you remain satisfied that your chosen funds are appropriate for your needs. You can view fund information and annual returns on the insurer’s website.