How goals-based investing could support your financial aspirations

Keep your eyes
on the target

Traditional investing often puts a lot of emphasis on maximizing returns, even at the expense of individual aspirations.

However, a new approach is gaining popularity—one that aligns investment strategies with personal goals. This method, known as ‘goals-based investing’ (GBI), ushers in a new way of thinking about financial planning that isn’t all about chasing returns or beating the market.

What is goals-based investing?

At heart, goals-based investing is driven by personalisation. It encourages investors to define their financial objectives and time horizon clearly, right at the start of the investment journey – be it saving up for a dream home, funding a child’s education or planning for retirement.

This clarity transforms the investment process from a mere numbers game into a more purposeful journey towards achieving their desired outcomes.

By focusing on specific goals instead of just returns, investors can consider tailored strategies that reflect their unique risk tolerances, time horizons and financial needs.

“Goals-based investing ushers in a new way of thinking about financial planning that isn’t all about chasing returns.”

Goals-based investing can deliver a more level-headed approach to monitoring investments. Research shows that when an individual can visualise their financial goals, they may be more motivated to adhere to their investment plans, even when the road ahead may be rocky.²

The greater or more important the goal, so the thinking goes, the less likely investors are to fall foul of making impulsive decisions when the markets are volatile.³

It also encourages individuals to reflect more holistically about their broader financial plan, taking into consideration income, expenses and other personal responsibilities.

By focusing on specific goals instead of just returns, investors can craft tailored strategies that reflect their unique risk tolerances, time horizons and personal responsibilities.”

How Lifecycle ETFs can support goals-based investing

As the investment landscape continues to evolve, innovative financial products are emerging to support this goals-based investing philosophy.

The first-of-its-kind range of Lifecycle ETFs from Amundi have been designed to automatically adjust asset allocation based on the investors evolving approach to risk.⁴ This makes it an ideal companion for those pursuing specific financial objectives over the long term.⁵

At the start of their investment journey the Lifecycle ETF combines a collection of stocks and bonds to drive potentially higher returns, but as investors get closer to their target investment date, the allocation of assets become increasingly cautious, reducing exposure to stocks and increasing holdings in more stable bonds.

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How does this work exactly?

This pre-allocated rebalancing aligns seamlessly with the goals-based investing approach. It means that investors are given a higher chance to drive gains in the early stages (when they have more time to make up for any potential losses) and then reduce risk in the later stages (when securing the investment becomes the priority).⁶

By tracking a diversified basket of stocks and bonds that reduces riskier assets over time, this fund allows investors to focus on their goals without the burden of constantly monitoring the markets.⁷

Exposure to equities decrease over time

Source: Amundi ETF. For more information about the index methodology please refer to the prospectus. Information given for indicative purposes only, may change without prior notice.

Why choose Amundi Lifecycle ETFs?

#1

Simple

The Amundi Lifecycle ETFs do all the hard work for you. So they could be ideal for long-term investors who lack the time or expertise to manage their investments on a day-to-day basis.

#2

Low cost

At the same time, this series of funds are cost-effective, with management fees of only 0.18%.⁸ Within the context of long-term investing, this can really make a difference to the potential returns.

#3

Accessible

This range of Lifecycle ETFs also offer flexibility and accessibility. Whilst they are designed to be held for five years or more, investors can rest assured that they can sell their investment at any time.

How to invest in Lifecycle ETFs

As with all goals-based investing, the Lifecycle ETF is all about setting specific targets, being clear on what your time horizon is and then making adjustments based on your evolving approach to risk.

To find out more about the each of the Lifecycle ETFs in the Amundi range, click on one of the target dates below:

Amundi Lifecycle 2030 UCITS ETF

Amundi Lifecycle 2033 UCITS ETF

Amundi Lifecycle 2036 UCITS ETF

Amundi Lifecycle 2039 UCITS ETF

Are you already investing for your long-term goals?

Yes, and I am on track!
I invest but not for specific goals
No, but now I am ready to take the next step
No, because I'm afraid of the risks involved with investing