Frequently asked questions  

Retiready Stability uses a combination of diversification and complex investments called derivatives to minimise large fluctuations up or down in value.  

Diversification means investing in lots of different types of investment (shares, bonds, cash, property), world regions, types of company and fund managers to reduce the risk of relying on one type alone. 

Derivatives can be used with the aim of reducing risk as well as making gains. Derivatives allow investors to gain exposure to an investment’s returns (for instance, a specific company’s shares) without actually physically owning it. As there’s no need to actually buy the investment, the fund can make changes cheaply, and more quickly. Derivatives also allow an investor to make money even when an investment goes down in value. 

However, there are risks in using derivatives:

• They may restrict the extent to which the fund benefits when markets go up in value. 
• They may also result in falls when markets move in a different direction (up or down) to that expected by the manager.

There’s no guarantee the fund will meet its objectives. The value of this investment can go down as well as up and investors may get back less than they invested.

Find out more about Retiready Stability