01 October 2018

GRIPs celebrate strong six year track record

5 min read

 
Helen Morrissey, Personal Finance Specialist

Helen Morrissey

Personal Finance Specialist

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Royal London’s Governed Retirement Income Portfolios (GRIPs) are celebrating six years of strong performance with all five portfolios demonstrating a track record of delivering above benchmark returns despite challenging conditions.

Since launch, these portfolios have dealt with market fluctuations caused by major events such as the US elections and Brexit, with all five portfolios delivering compound annual growth rates of between 4.91-10%.

The GRIPs were launched in August 2012 as one of the first investment solutions designed exclusively for customers looking to take a sustainable income from their pension. The portfolios are based on a diversified mix of assets designed to capture market upside and respond better to market downturns than a pure growth portfolio. Demand for the portfolios has grown strongly with assets under management currently standing at approx. £2.1bn.

The resilience of GRIPs can be shown in that someone who invested £100,000 in GRIP 3 in 2012 and withdrew £4,000 every year would have a balance of £125,354 today. Someone invested in the same fund and withdrawing £6,000 per year would still have £110,537 in their fund. See table below.

Table: Showing how much would be left if you had invested £100k when GRIPs launched and took different annual incomes (28/08/2012 - 28/08/2018)

Annual Income
Name £4,000 £4,500 £5,000 £5,500 £6,000
ABI Mixed Investment 20%-60% Shares - pen £112,921.64 £109,418.55 £105,915.45 £102,413.20 £98,910.11
GRIP 1 £105,746.87 £102,293.10 £98,839.33 £95,386.38 £91,932.61
GRIP 2 £115,312.65 £111,733.60 £108,154.55 £104,576.35 £100,997.30
GRIP 3 £125,354.83 £121,650.23 £117,945.63

£114,241.91

£110,537.31
GRIP 4 £137,338.82 £133,489.60 £129,640.38 £125,792.08 £121,942.86
GRIP 5 £145,492.13 £141,532.50 £137,572.88 £133,614.20 £129,654.57

Source: Lipper, 29.08.2018. 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

Lorna Blyth, Head of Investment Solutions at Royal London Intermediary Pensions, said:

The GRIPs portfolios were one of the first solutions developed to meet the needs of people looking to take a sustainable income from their pension over the long term. As well as benefiting from investment upside people in this position need to have the comfort of knowing their income is sustainable during times of uncertainty and the GRIPs track record demonstrates they are able to meet these needs.

Gary Friel, Chartered Financial Planner at Kent Insurance Services Ltd, has been using the GRIPs portfolios for several years and said:

I have been using the GRIPs portfolios for several years and have found them to be a well-crafted investment solution backed up by a robust governance process. Unlike other multi-asset solutions the GRIPs portfolios are specifically designed for decumulation and they are ideal for clients looking to take a regular income within specific risk confines. These portfolios achieve what they are designed to do as evidenced in their impressive results.

The GRIPs invest in a mix of equities, high yield bonds, corporate bonds, index linked gilts, commodities and property funds managed by Royal London Asset Management (RLAM). They also benefit from tactical asset allocation tilts by RLAM’s Head of Multi-Asset, Trevor Greetham. The portfolios benefit from a robust governance process with an Investment Advisory Committee meeting every quarter to review investment options and asset allocation so customers are reassured that each portfolio is on target to achieve its particular level of risk and income.

- ENDS -

Notes to Editors

You can find out more about the Governed Retirement Income Portfolios (GRIPs) here:

https://adviser.royallondon.com/pensions/investment/our-investment-options/grips/

For further information please contact:

Helen Morrissey, Corporate PR Specialist – Long Term Savings

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June.

At Royal London, we’re proud to champion the value of impartial advice. We believe it plays a crucial role in connecting people with the products that are right for them – and is key to delivering better outcomes and experiences for our customers. At the same time, it helps to build trust in our products and services.

Royal London works alongside advisers not in competition with them. That’s why we’ve made some key commitments to the intermediary market. You’ll find more detail on our commitment to advisers at http://adviser.royallondon.com/campaigns/our-commitments/