Vive Fund Switch 2024: Your investments

Why this fund switch?

Vive's investment team carefully evaluates our investment funds annually and monitors the product offerings on the financial markets.

This is how we ensure that our clients' investment plans remain optimal.

This year, we have identified some better alternatives to our current investment funds within three of our investment categories:

• Money Market Investments Euro
• Euro Government Bonds
• Euro Inflation-Linked Government Bonds
  

Below we explain per category why the switch to the new investment fund is an improvement to our clients' investment plans and what this means for you as a client.

The new investments

Money Market Investment Euro

The new fund in the Euro Money Market Investments category is the “DWS ESG Euro Money Market Fund”. Euro Money Market Investments is the least volatile category in our model.

Money market funds invest in short-term and safe bonds to offer stable returns with minimal risks. Because money market funds only invest in short-term bonds, they are very liquid. This means that investors can quickly and easily withdraw their money from the fund when needed.

The new fund has lower costs, making it more advantageous to switch. Both funds, by the way, have no sales or purchase costs, so the switch does not cost any money. We have calculated that an investment of €1,000 in the new fund saves €7.44 over a period of 5 years. This may seem like a minimal amount, but on a large scale and over time it can have a greater effect than you might expect.

Euro Government Bonds

The new fund in the Euro Government Bonds investment category is the "Vanguard Euro Government Bond Index Fund" . Government bonds are loans that you give to the government. In return, the government pays you interest regularly, and at the end of the term you get the borrowed amount back.

Our government bond funds contain loans from European governments in the Eurozone with a good credit rating ('investment grade'). It is a safe way to invest money, because these European governments are reliable in repaying their loans.

The new fund has a longer duration than the current government bond fund. This means that the new fund has loans with a longer average term. Because these loans are fixed for a longer period of time, the fund is more sensitive to changes in interest rates. If interest rates rise or fall, this will have more impact on the value of the new fund. This is also called interest rate risk. Our analysis has shown that investing in a government bond fund with a longer duration provides better diversification for portfolios in our model. The new fund also has less concentration in countries with a relatively higher risk, such as France and Italy.

In addition, the fund has lower costs. We have calculated that an investment of €1,000 in the new fund will save €5.00 over a period of 5 years. This is based on the sales costs of the old fund. The new fund has no purchase costs.

Euro Inflation-Linked Government Bonds

The new fund in the Inflation-Linked Euro Government Bonds investment category is the "Vanguard Eurozone Inflation-Linked Bond Index Fund".

Vive customers whose retirement age is approaching will gradually switch to inflation-linked government bonds in the pension plan. These are loans from the government where the value grows with inflation. This means that if prices rise (inflation), the interest and the amount you receive back will also increase. These bonds protect your built-up pension from inflation.

The new fund has a better spread across European countries. It invests in bonds from more different European countries. Like the old fund, the new fund has the condition that the governments must be creditworthy ('investment grade') and it only contains bonds from countries in the Eurozone. By spreading the investments across more countries, we are spreading the risk. At Vive, we believe risk diversification and risk management are important.

In addition, the new fund has lower costs than the current fund. We have calculated that an investment of €1,000 in the new fund will save €2.25 over a period of 5 years. This is based on the sales costs of the old fund. The new fund has no purchase costs. For most customers, the ultimate savings will be even higher, as they are not yet investing in inflation-linked government bonds and therefore do not incur any sales costs now.

In conclusion

The fund switch improves Vive's portfolios. The government bond fund fits better into our model due to the higher duration of the fund. The inflation-linked government bond fund has better risk diversification. In addition, these funds, like the new money market investment fund, have lower costs.

With these changes, we ensure that your investment plan is better positioned for the future.

Kind regards,
The Vive Investment Team