About the Diversified Growth Fund
The Diversified Growth Fund (DGF) is designed to provide stable growth, above the rate of inflation, without too much volatility (ups and downs in value) over the long term. To achieve this it uses a broad range of investments, an approach known as diversification. The investments are divided into five groups which are expected to perform in different ways.
The DGF forms part of the Journey Path, where Scheme pension savings gradually move from the DGF to a lower risk fund – the Retirement Countdown Fund (RCF) – starting 15 years before planned retirement age.
Responsible investing remained a priority for the fund. Our responsible investment allocation increased to 83% from 70% last quarter, and from 52% over the past nine months.
You can find out more about the Journey Path, the DGF’s objectives and our commitment to responsible investment in the Statement of Investment Principles.
Investment performance
The last quarter of 2022 brought some respite after a challenging investment environment in the third quarter. In the three months to 31 December 2022, the DGF’s investment return was 6.3%compared to the return objective of 3.7%.
The fund performed well in October and November with a slight dip in December. After September’s market lows, new data emerged to show that inflation was slowing down, causing equities and bonds to recover in October and November. Despite the positive news on inflation, central banks reinforced interest rate hikes in order to control inflation. Commodities and equities performed well, in particular for emerging market investments, which responded positively to China’s relaxation of Zero Covid restrictions and the re-opening of the economy.
Download the December 2022 Diversified Growth Fund factsheet.
See all of our historical Diversified Growth Fund factsheets.