We set an estimated growth rate (EGR) — which is an estimate of how well we expect the underlying investments of the fund to grow over the long term. The EGR isn’t guaranteed and may change in the future, and we only use it to calculate smoothing of unit prices. We show this rate as a yearly percentage but we divide it to give us a daily rate, which we then use to calculate the smoothed unit price.
Each day we compare the return earned on the underlying investments with the daily EGR. Then we calculate the daily smoothed growth rate, currently halfway between these two figures. And that’s how we get the next day’s smoothed price. The price of your fund can still rise and fall each day, but not as much as it would without smoothing.
People leaving the fund can also affect its price. Half of the profits or losses created in the fund by those leaving are added by the smoothing process into the next day's unit price.
Frequently asked questions
Find out all the answers to your questions in our frequently asked questions section.
Guide to investing
To find out more about our with-profits funds, please read our guide to investing in our with-profits funds.