Does such a fund exist?

Retyre

Having read stories of supposed low risk funds taking a serious hit when markets go bad I have part of my pension fund in deposit funds which are basically static but of course reducing by allbeit low inflation.

Now I understand there is a balance between risk and reward but if I'm prepared to expect a genuinely low rate of return (say inflation) is there a provider/fund(s) that will pay this without the risk of a big hit (defined as more than say 8%) if the markets go south in a big way?

Many Thanks

Your_Hero

There are many funds designed to do this. But there are no guarantees that the downside risk will be restricted to 8%.

Are you likely to retire soon? I can't see any other reason to hold deposit funds.

dunstonh

Now I understand there is a balance between risk and reward but if I'm prepared to expect a genuinely low rate of return (say inflation) is there a provider/fund(s) that will pay this without the risk of a big hit (defined as more than say 8%) if the markets go south in a big way?

Risk is a sliding scale and there are funds that cover the risk scale. So, yes you can tailor your investments to suit your tolerance to a certain level of volatility.

However, any downside reduction will result in an upside reduction as well. Going too low down the volatility scale can actually increase other risks

Linton

There are funds run with the objective of achieving a positive return at all states of the equity market - see the IMA Targetted Absolute Return sector in trustnet. You will find that the degree of success is variable, but I would suggest including one in a wealth preservation portfolio. Also there are ITs with an objective of wealth preservation - Ruffer Investment Trust is a fund whose performance graph seems to have been completely unaffected by the 2007/2009 crash.

To find more you could try sorting the Trustnet lists on "Risk Score" and find something there of interest. However be careful of your exposure to safe gilt funds as at some point they will suffer when interest rates rise.

Sobryma

Another option might be look to the IMA Mixed Investment 0-35% Managed Funds, these are low in equity - although that does not protect if other asset classes were to crash. I hold one as a core 'safe' holding in one of my pensions.

Multi asset in theory should help but correlations between assets can change especially in a market panic.

Retyre

Thank you everyone