Bankinter launches two ‘life-cycle’ pension funds: ‘Bankinter Jubilación 2030 and Bankinter Jubilación 2040’
Both follow a dynamic fund management process, adjusting portfolio composition over time up to retirement.
The appropriate age profile for customers is 45 to 55 years of age with Bankinter Jubilación 2030, and 35 to 45 years of age with Bankinter Jubilación 2040.
Bankinter has begun to market two new pension funds known as ‘life-cycle’ funds: Bankinter Jubilación 2030 and Bankinter Jubilación 2040, included within the bank’s pension plan offering.
This type of fund utilises active fund portfolio management, whereby the balance of equity and fixed-income securities will be adjusted annually as customers near their retirement. Therefore, during this period, the fund’s risk will be gradually reduced by decreasing the weight of equities in order to increase that of fixed-income securities and low-risk financial assets.
The goal is to take advantage of the high growth potential of equities during the fund’s initial years and protect customers’ accumulated wealth, increasing fixed-income over equities as customers approach retirement.
In the beginning, Bankinter Jubilación 2030 and Bankinter Jubilación 2040 will invest a maximum 50% and 80% of their capital in equities, respectively. Over time, this figure will continue to fall until it ends up below 12% by the time customers retire. Therefore, both funds will be initially categorised as ‘flexible balanced equity funds’.
They will also have similar fees to those of other pension plans, despite their dynamic portfolio management.