Investment basics

Balancing risk and return

We have a range of investment options for you to choose from, each offering a different mix of the same ingredients. Those ingredients are growth assets and income assets. Growth assets are best suited to long-term saving. Income assets are best suited to short-term saving. Here’s why.

Growth assetsIncome assets

Diversification

You’ll be familiar with the saying that it’s wise not to have all your eggs in one basket. By spreading your investments across different asset classes, you can reduce the volatility of your overall portfolio without lowering your expected return. This is referred to as asset diversification.

In addition, different assets perform differently in different market conditions. Fixed-interest investments such as bonds, for example, might produce solid returns at a time when shares are underperforming and vice versa.

One of the advantages of saving with the scheme is that your savings are spread across many different investments across a range of asset classes. The mix of investment classes varies depending on which investment option you choose.