Updating your FutureWise TDF to include private assets
We designed our default investment strategy, FutureWise, to make it easy for us to include interesting opportunities when we find them, so we can help our members make the most of their pension savings.
We’re pleased to say we are now adding private assets to FutureWise Target Date Funds (TDF). These pages give you an overview of the changes and their potential benefits, as well as answering specific questions you may have.
Introducing private assets
Private assets are investments that are bought and sold privately. This makes them different to investments such as shares that are sold on stock exchanges.
Our short video tells you more about what private assets are and why we think they are an exciting investment opportunity. You can also learn more by clicking on the ‘your questions answered’ tab above.
What this change means for you
The key reason we’re making this change is that it can potentially boost your long-term returns, without fundamentally changing the overall strategy’s risk rating.
This is because private assets have the potential to produce higher returns than many other types of investments over the long-term – though, of course, this is not guaranteed. The value of any investments can fall as well as rise, so you may get back less than you invest.
The change also opens up new areas for us to invest in, so we can increase the level of ‘diversification’ in your pension. This is a technical term that means spreading your money across a wide range of investments with the aim of managing risk more effectively.
Private assets tend to be more expensive than stocks and shares, so there will be a small and gradual increase to the ongoing investment charge. This is explained in detail in two questions under the ‘your questions answered’ tab.
Fidelity Webinar: An update on the FutureWise investment strategy
Watch the recording
How and when we’re making this change
We’re including private assets in FutureWise through a new fund called the Fidelity Diversified Private Assets Long-Term Asset Fund. As that’s quite a long name, we also just call it ‘our LTAF’. This fund can invest in different types of private assets and aims to provide access to the best private asset opportunities across the market.
We will add private assets to Target Date Funds dated from 2045 to 2070. (If you need a quick reminder about Target Date Funds, please see the ‘your questions answered’ tab.) We plan to do this gradually over three years from the first three months of 2025. The final allocation will be 15% invested in our LTAF for funds dated from 2050 to 2070 and 11% for the 2045 fund.