Return on Investments 2018 LifeSight funds
At LifeSight you accrue pension by means of investing. Your pension payment is therefore dependent on the return on your pension capital. Via this message we inform you on investing at LifeSight and what the return has been on the LifeSight funds over the year 2018.
Smart Investing at LifeSight
LifeSight makes sure that your pension investments match your age and income. Are you relatively young, then you are automatically investing more in the Return fund which is targeted at reaching a high return. The returns are needed in order to accrue a sufficient pension. The closer you get to your retirement date, the more you invest in the Matching funds which have a defensive nature. The money you have saved with LifeSight can be used to buy a pension with an insurer when you retire. You hand over the saved capital to an insurance company and will receive a lifelong monthly pension for that.
Below you can find an overview of the achieved returns on our LifeSight investment funds, both on the year 2018 as since the start of the investment fund (4 November 2014). The achieved fund returns will be compared to the returns of the fund benchmark, a measure of performance to compare the LifeSight funds.
All shown investment returns of the LifeSight funds are net, hence after deducting all cost.
| 2018 fund return | 2018 benchmark | Since start fund return (average per year) | Since start benchmark (average per year) | |
|---|---|---|---|---|
| LifeSight Matching Kort fund | -0.6% | -0.5% | 2.0% | 1.4% |
| LifeSight Matching Lang fund | 4.0% | -0.5% | 4.9% | 2.9% |
| LifeSight Rendement fund | -4.9% | -4.4% | 5.0% | 5.2% |
In the shown investment returns the reduction on the fund costs which is agreed upon with your employer, is not taken into account. The reduction is paid out monthly by buying an additional amount of pension capital.
LifeSight Matching funds
You invest more and more in Matching funds the closer you get to your retirement age. The goal of these funds is to keep the risk of a setback as low as possible such that your expected pension will probably closely match the pension you can buy at an insurer. Setbacks may occur when interest rates decrease or prices increase (inflation) in the period before retirement. With lower interest rates the insurers demand more capital for the same pension payment. With increasing inflation you can buy less pension as all becomes more expensive. Therefore, the benchmark of your Matching funds is linked to the tariffs of the insurers for converting your capital to a monthly payment with indexation based on inflation.
Interest rates have barely changed during 2018. Only very long term interest rates have decreased slightly. A decrease of the interest rate has a positive effect on the value of fixed-income securities in the LifeSight Matching funds. The impact will be larger for bonds with longer durations. Due to, among others, the decrease of the interest rates the LifeSight Matching Long fund achieved a positive return of +4.0%. The LifeSight Matching Short fund achieved a small negative return of -0.6% after reduction of management fees and transaction costs.
Compared to the benchmark the LifeSight Matching Long fund had a much higher return. This is mainly because of a stronger decrease of the interest on inflation linked government bonds compared to the interest rate used for the purchase rates of insurers (the benchmark). The return of the LifeSight Matching Short fund was in line with the benchmark.
This fund invests in a group of different investment funds with a goal to reach a good return at reasonable risk. LifeSight does not invest itself but chooses the best asset managers to invest your money in the Return fund.
At the end of 2018, investors became more and more worried, for example about lower economic growth in America and the consequences of political choices such as the shutdown of the American government, the escalating trade war between China and America and the settlement of the United Kingdom leaving the EU (‘Brexit’). As a result, stock prices of riskier investments, such as shares, fell sharply. This also had consequences for the fund return. All investment categories within the LifeSight Return fund achieved a negative return on investment last year. However, the differences were large. The most negative returns were achieved on emerging-market equities (-11.0%), while the European Corporate Bonds showed the best return during 2018 (-0.1%). By spreading widely across several global asset classes, the fund return achieved in 2018 was -4.9%.
Compared to the return of the benchmark of the fund (-4.4%), the achieved return of the LifeSight Return fund is a little bit behind. The difference is caused by withheld standard management fee (OCF) and transaction costs.
Return on your pension capital
The current year return (2019) and your personal investment mix can be found under My Investments on MijnLifeSight. You can see a prognosis of your expected pension on your Dashboard.
More information and Self Investing
For more information on the investment funds of LifeSight and the returns of the Self Investing funds, visit the factsheets.