What are your potential returns?
Over the growth stage of your pension plan, the return you may receive will depend on a variety of factors such as:
The number of years the contributions are invested over.
Whether you make regular contributions that may benefit from pound cost averaging, or single premium contributions.
The amount of fees that are deducted from your pension fund.
The level of risk you choose to take with your pension savings.
When you are investing for 5 years or longer, it is generally accepted that the higher the amount of risk you expose your money to, the higher the level of returns you may expect. However, the higher level of risk, the more the value of your money will fluctuate over the growth period. This is why we have appointed an expert to manage the investments under each model portfolio.
Relationship between Risk and Return
The diagrams below should help you understand the different model portfolios and where they stand on the risk-return spectrum which aims to help you decide which level of risk best suits your circumstances.
Low Risk
Prosperity Model Portfolio
Gross Return (2018)2.64%
This is the total return on investment before deducting fees as measured for the 12-month period ending May 2018.
Benchmark
This is the investment performance of a range of reputable and relevant indices that the investment performance of the Prosperity Model Portfolios are compared against.
A benchmark is a standard of references that allows comparison to be made.
A benchmark is a standard of references that allows comparison to be made.
Average Annualised Return8.18%
This is the average return p.a. of the 5-year benchmark
Benchmark
Gross Return (5 years)40.88%
This is the total return on investment before deducting fees as measured for the 5-year period starting April 2012 to April 2017.
Type of
InvestorCautious investor
InvestorCautious investor
Potential
for returnsLow / modest returns
for returnsLow / modest returns
Fluctuations
in pension fundFrequent
but likely to be minor
in pension fundFrequent
but likely to be minor
Modest expected returns
Medium Risk
Prosperity Model Portfolio
Gross Return (2018)6.48%
Benchmark
Average Annualised Return10.00%
Benchmark
Gross Return (5 years)50.02%
Type of
InvestorComfortable to take a medium level of risk
InvestorComfortable to take a medium level of risk
Potential
for returnsModerate long term returns
for returnsModerate long term returns
Fluctuations
in pension fundLikely to experience substantial changes +/- to capital value
in pension fundLikely to experience substantial changes +/- to capital value
Medium expected returns
High Risk
Prosperity Model Portfolio
Gross Return (2018)10.73%
Benchmark
Average Annualised Return8.56%
Benchmark
Gross Return (5 years)42.82%
Type of
InvestorTolerance for high risk
InvestorTolerance for high risk
Potential
for returnsPotential for high returns over the long term
for returnsPotential for high returns over the long term
Fluctuations
in pension fundMay be frequent and significant
in pension fundMay be frequent and significant
Higher expected returns
It is important to be aware that past performance is not an indicator of future performance.
Remember that when investing, your capital is at risk. The value of your pension may go up as well as down and you may get back less than you have put in.
