Mercer Aspire Low Volatility Equity

The Low Volatility Equity fund invests in a selection of specialist active managers to provide diversified exposure to lower-volatility international equities. It focuses on equities across regions such as North America, Europe, the UK, Japan and Asia-Pacific. The fund may also hold non-equity positions at times to support its approach.

The Low Volatility Equity fund is designed to seek long-term growth while aiming for around 20% lower volatility than its benchmark over 5 to 7 year periods. Mercer regularly reviews and may change the allocations to the specialist managers, which helps keep the portfolio aligned with the fund’s objective. In plain language, lower volatility means the fund is intended to have smaller swings in value than a more typical equity fund.

The Low Volatility Equity fund is described as suitable for people with more than seven years to retirement and for investors who are willing to accept rises and falls in value in pursuit of long-term growth. Its low-volatility approach may appeal to investors who want equity exposure but are looking for a smoother ride than a broader share portfolio. It is still an equity fund, so values can go down as well as up.

The Low Volatility Equity fund highlights inflation risk, currency risk and manager risk. Currency risk means changes in exchange rates can affect returns when the fund holds overseas investments. Manager risk means the performance of the underlying specialist managers can affect how the fund performs.

Yes. The Low Volatility Equity fund seeks to promote environmental characteristics under Article 8 of the Sustainable Finance Disclosure Regulation. Its “do no significant harm” principle applies only to investments that take into account EU criteria for environmentally sustainable economic activities, while the rest of the portfolio does not apply those criteria.