Sampo 2040 Funds: Suitability

The Sampo 2040 Fund is suitable for those whose life insurance contract ends close to 2040 and who plan to use their savingsat that date. The Fund offers an ideal investment strategy for those who want to invest in equities and shift to bonds when retirement approaches.

Stock market investments (equities) are more volatile than cash or bonds and so their value is prone to fluctuation. Year on year returns are likely to vary more dramatically, possibly delivering negative returns in some years. Conversely, equities can perform better than cash or bonds in some years and equities provide in general a better overall rate of return over a long period of time. However, this is not guaranteed.
 
Investing for retirement, as with all investment opportunities, is about balancing performance against risk. The tolerance to risk will depend on a whole range of factors; for example, whether or not other savings exist to fall back on. However, the most important consideration is likely to be age and time remaining to retirement. A younger investor may typically be more likely to invest in equities. As the time to retirement approaches, the investor may look to consolidate gains by switching equities into less volatile investments such as bonds and cash funds.