The main benefit of a unitised with profit fund to an RAC holder is:

• A. The right to choose which individual assets the fund should invest in.
• B. A smoothed investment return over time.
• C. The right to take retirement benefits at any time.
• D. The right to encash the units at guaranteed terms at any time

Answer: (B)

The key idea is smoothing. A unitised with-profit RAC aims to give investment returns that aren’t as volatile as the underlying market moves by declaring regular bonuses and, if appropriate, a final bonus. These bonuses are added to the unit price, spreading gains (and losses) over time so the holder experiences a steadier, more predictable growth in value. The other statements describe features that aren’t the primary benefit: the fund is managed by the provider rather than chosen by you, retirement benefits aren’t typically accessible at any time, and encashment isn’t guaranteed at fixed terms. So the main benefit is a smoothed investment return over time.