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Drawdown investment ideas

Drawdown investment ideas

Getting your strategy right

Drawdown puts you in control of the money in your pension – you choose your investments and how much income to take (if any). It’s likely that your strategy for taking an income will affect where you choose to invest. You can find out more about income strategies in our guide to investing in drawdown.

Remember income isn’t secure. Investments can fall as well as rise in value, so you could get back less than you invest. You’ll need to regularly review your choices to make sure you stay on track.

Looking for investment inspiration?

You’re free to choose from our full range of investments, including funds, shares, bonds and more. A fund is a collection of investments, chosen and run by an expert fund manager, so they’re a popular choice. There are thousands of funds out there, but our team of experts have highlighted some funds below that they feel offer promising investment opportunities for drawdown.

Some are individual funds you could include as part of your portfolio, and some are multi-manager funds which invest in a range of other funds to give you a balanced portfolio in a single fund.

The fund ideas below aim for either long-term growth, to produce an income or to defend against market falls. Remember though, past performance isn’t a guide to the future and these ideas aren’t personal advice.

You should choose investments based on your own preferences and research. Take advice if you’re not sure. Please read the key information and fund factsheet, including charges, of any investment before making your decisions.

Alternatively, if you've thought about your drawdown goals, but are unsure how to achieve them, you may want to consider investment pathways. There are four pathways to choose from, and each matches a potential retirement goal with an investment option.

Investment ideas for three drawdown strategies

Drawdown investors not taking any income yet may want to choose funds which aim to provide long-term growth.

Rathbone Global Opportunities

Invests in mostly large and medium-sized companies with the potential for growth and dominance in developed markets, such as the US, UK and Europe. The fund also has the flexibility to invest in smaller companies and emerging markets, both of which are higher risk.

View factsheet including charges View Key Investor Information

Schroder Small Cap Discovery

Invests in innovative smaller companies that are based in emerging markets, or earn a high share of revenue from these areas. A good opportunity for investors looking for reward in the long-term, if they are prepared to accept the additional risks.

View factsheet including charges View Key Investor Information

AXA WF Framlington UK

Investments are cherry-picked from the best opportunities across the UK market, including companies of all sizes. A fund with the flexibility to hold onto smaller companies with the hope they grow into long-term gains, though these are higher risk.

View factsheet including charges View Key Investor Information

HL Multi-Manager Special Situations

A ready-made portfolio holding a variety of funds investing in companies of all sizes across the globe. Exposure to smaller companies and emerging markets could boost long-term growth, although it increases risk.

View factsheet including charges View Key Investor Information

Please note funds within HL Multi-Manager Special Situations hold Hargreaves Lansdown plc shares.

Those taking income generated by their investments (also known as the natural yield) may want to choose funds that aim to pay a higher yield though these can change and aren’t a reliable indicator of future income.

Aviva UK Listed UK Equity Income

Mainly invests in large and medium-sized UK companies, focusing on a small collection of their best ideas to boost growth potential, but with added risk. Companies that pay a high income now are blended with those that have the potential to grow dividends in future.

View factsheet including charges View Key Investor Information

EdenTree Higher Income

A diversified fund that can invest up to 85% in shares from across the globe, including higher-risk emerging markets. A focus on companies in good financial health that are able to pay growing dividends or interest due to bonds.

View factsheet including charges View Key Investor Information

HL Multi-Manager High Income

An agile fund which moves across the market taking advantage of more attractive income opportunities as they emerge. Aims to distribute a monthly, high income to investors which can grow over the long term.

View factsheet including charges View Key Investor Information

Those drawing an income from capital (which would mean selling investments to fund income), may favour investments which aim to shelter against market downturns.

Pyrford Global Total Return

A sensible investment approach. This fund invests in a combination of shares, government bonds and cash with the aim of achieving long-term growth with less volatility than the stock market. The fund also has the flexibility to feature investment in higher risk emerging markets.

View factsheet including charges View Key Investor Information

BNY Mellon Real Return

A flexible option which invests globally across shares commodities, cash and bonds, including higher-risk high yield bonds. A choice for investors who want to shelter their wealth during volatile periods.

View factsheet including charges View Key Investor Information

Troy Trojan

Aims to help shelter investors' money during the tough times and grow it over the long term. This fund contains the shares of quality companies, and the manager increases exposure to bonds, gold and cash when he thinks the stock market has less potential to grow and the outlook is less certain. The fund holds a small number of investments including smaller companies, both these factors increase risk.

View factsheet including charges View Key Investor Information

HL Multi-Manager Strategic Assets

Designed to perform well in a variety of market conditions. This fund has a defensive core invested with managers who combine different assets and aim to switch between them at the optimum time. With some exposure to emerging markets, smaller companies and high yield bonds to boost growth, all of which add risk.

View factsheet including charges View Key Investor Information

Keeping a cash buffer

It’s important to consider keeping a cash buffer, in or outside of your pension. If the market or the income from your investments fall, you’ll have a cash source to draw an income from. This means you won’t be forced to sell when prices are low.

Holding large amounts of cash does come with its own risks though. It can lose value over time if inflation is above interest rates.

More about how much cash you should hold

Why variety can help reduce risk

There’s always some risk with investing, but it’s possible to reduce the impact of the risks you face by making sure you have a good variety of investments.

Different types of investments perform well at different times, and so do different markets around the world. So holding a mixture of investments, across various markets, could help shelter you when some areas don’t perform as well as others.

Multi-Manager Funds

If you’re not comfortable choosing a range of investments to build a portfolio for yourself, and you’re happy with the costs involved, you might consider HL Multi-Manager Funds run by our sister company Hargreaves Lansdown Fund Managers.

Each fund is a collection of what our experts believe are the best funds available to achieve a particular objective, in a single, convenient investment. Because of the management and research work involved, and because the individual fee of each fund we select is included, they carry a higher charge than standard funds. Our platform charge of up to 0.45% each year also applies. View drawdown charges.

Want to find out more?

Our guide to investing in drawdown, explains the relationship between investing and taking income in more detail. It could help to get you thinking about your own strategy and where you might invest.

Download your guide