Your Essentie Pensioen: an update on LifeCycle Beleggen

Essentie Pensioen uses LifeCycle Investing by NN Investment Partners (NN IP). With LifeCycle Investing, the experts at NN IP have developed a solution to achieve an optimal risk-return ratio.

At a young age, one can afford to take a relatively high risk. If the value development of investments is negative, e.g. due to a drop in equity prices, there is indeed still plenty of time to make up for the losses.  As retirement approaches, however, there is increasingly less time to offset shocks in the financial markets. At that point, there will be more focus on safer investments and risks will be hedged. LifeCycle Investing is therefore composed of two parts:

  • Pension returns: by means of a single fund that typically invests in a broad basket of actively managed funds, with the aim to achieve attractive returns (NN First Class Return Fund)
  • Pension matching: using three fixed income funds with passive characteristics and a duration profile, with the objective of limiting interest rate risks wherever possible (NN Liability Matching Funds M, L and XL)

LifeCycle Investing has three risk profiles: defensive, neutral and offensive. Based on of these profiles, we consecutively invest more and more in the return part. Consequently, the defensive profile has the lowest downside risk, compared to the neutral and offensive profiles.

More information on composition and performance
In the documents below (all in PDF) more information is provided about the composition and performance of the standard LifeCycle Investing as well as the 4 underlying funds it is constructed with.

Next to the above described LifeCycle, an employer can offer its employees the option to make the investment decisions themselves. For this investment option, a set of standard funds has been selected by Altis Investment Management.