Evaluating Scottish Widows Funds 1 October 2018

Transcription

1 Evaluating Scottish Widows 1 October 2018 This information is for UK Financial Advisers use only and should not be distributed to or relied upon by any other person.

2 Contents Pension Statistics Life Statistics Guide to terminology

3 Pension Statistics 1 October 2018 RATINGS ABI Asia Pacific excluding Japan Equities Sector SW Fidelity Asia Specialist Bronze SW SSgA Asia Pacific ex Japan Equity Index Specialist SW Veritas Asian Specialist Silver Formerly Lloyds TSB Far East Pension Fund Factsheet ABI Commodity/Energy Sector SW JPM Natural Resources Specialist Bronze SW BlackRock Gold & General Specialist Gold ABI Deposit and Treasury Building Society * Cautious ABI Europe ex UK Equities Sector European Adventurous SW Fidelity European Adventurous Bronze SW JPM Europe Dynamic (ex UK) Adventurous Bronze SW SSgA Europe ex UK Equity Index Specialist Formerly Lloyds TSB European Pension Fund Factsheet ABI Europe incl UK Equities Sector SW Allianz European Equity Dividend Adventurous ABI Flexible Investment SW Payden Absolute Return Bond Progressive Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

4 Pension Statistics 1 October 2018 RATINGS ABI Global Emerging Markets Equities Sector Emerging Markets Specialist SW JPM Emerging Markets Specialist Bronze SW SSgA Emerging Markets Equity Index Specialist Fundamental Index Emerging Markets Equity Specialist Fundamental Low Index Emerging Markets Equity Specialist ABI Global Equities Sector Global Equity Adventurous International Adventurous International Equity Tracker * Adventurous Multi-Manager International Equity Adventurous Opportunities Portfolio Progressive SW Fidelity 50:50 Special Situations Adventurous SW Fidelity Global Special Situations Adventurous Silver SW Newton Global Income Adventurous Neutral SW Newton Global Equity Adventurous SW SSgA 50:50 Global Equity Index Adventurous SW SSgA International Equity Index Adventurous Fundamental Index Global Equity Adventurous Fundamental Low Index Global Equity Adventurous ABI Global Fixed Interest Sector SW Invesco Perpetual Global Bond Balanced Bronze SW Newton International Bond Balanced Bronze ABI Global Property Sector Dynamic Property Progressive European Real Estate Adventurous Multi-Manager Global Real Estate Progressive SW Schroder Global Cities Real Estate Adventurous

5 RATINGS ABI Japan Equities Sector Japanese Specialist SW Baillie Gifford Japanese Equity Specialist SW Schroder Tokyo Specialist Gold SW SSgA Japan Equity Index Specialist Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

6 Pension Statistics 1 October 2018 RATINGS ABI Mixed Investment 0%-35% Shares Sector Defensive Managed Balanced ABI Mixed Investment 20%-60% Shares Sector Cautious Managed Balanced Diversified Assets Balanced Multi-Manager Diversity Balanced SW Henderson Cautious Managed Balanced SW Invesco Perpetual Distribution Balanced Bronze SW Investec Cautious Managed Progressive Silver SW Jupiter Distribution Balanced Bronze ABI Mixed Investment 40%-85% Shares Sector Consensus Progressive Formerly Lloyds TSB Managed ex TSB Fund Factsheet Formerly Lloyds TSB Managed Pension Factsheet Formerly Lloyds TSB Pension Managed S2 Factsheet Mixed Progressive SW BlackRock Managed Progressive SW Fidelity Managed Progressive SW Invesco Perpetual Managed Progressive SW Newton Managed Progressive SW Schroder Managed Progressive

7 RATINGS ABI Mixed Investment 60%-100% Shares Sector Cash Cautious Formerly Lloyds TSB Cash Pension Fund Factsheet Formerly Lloyds TSB Guaranteed Deposit Pension Fund Factsheet Multi-Manager Select Boutiques Progressive ABI Money Market Sector SW Baillie Gifford Managed Progressive ABI North America Equities Sector North American Adventurous SW Baillie Gifford North American Equity Adventurous SW Fidelity American Adventurous SW Schroder US Smaller Companies Specialist Silver SW SSgA North America Equity Index Adventurous SW Artemis US Select Adventurous Bronze Formerly Lloyds TSB American Pension Fund Factsheet ABI Protected/Guaranteed Sector SafetyPlus Cautious ABI Specialist Sector Adventurous Solution Progressive Balanced Portfolio Balanced Balanced Solution Balanced Cautious Portfolio Cautious Cautious Solution Cautious Defensive Solution Cautious Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

8 Pension Statistics 1 October 2018 RATINGS ABI Specialist Sector (continued) Discovery Solution Balanced Dynamic Solution Progressive Premier Pension Portfolio 1 Factsheet Premier Pension Portfolio 2 Factsheet Premier Pension Portfolio 3 Factsheet Premier Pension Portfolio 4 Factsheet Premier Pension Portfolio 5 Factsheet Premier Pension Portfolio A Factsheet Premier Pension Portfolio B Factsheet Premier Pension Portfolio C Factsheet Progressive Portfolio Progressive Retirement Portfolio Factsheet Retirement Portfolio Factsheet Retirement Portfolio Factsheet Retirement Portfolio Factsheet Specialist Global Equity Adventurous Strategic Solution Progressive SW Aviva Multi-Strategy ('AIMS') Target Income Balanced SW Baillie Gifford Multi Asset Growth Balanced SW Insight Global Absolute Return Balanced SW Investec Diversified Growth Balanced Neutral SW JPM Global Macro Balanced Balanced SW Newton Real Return Progressive Silver SW Nordea 1 GBP Diversified Return Progressive SW Schroder Diversified Growth Progressive SW SLI Global Absolute Return Strategies Balanced SW SSgA Strategic Diversities Progressive

9 RATINGS ABI Sterling Corporate Bond Sector Corporate Bond Cautious SW Fidelity MoneyBuilder Income Cautious Gold SW Invesco Perpetual Corporate Bond Cautious Gold SW SSgA Sterling Corporate Bonds All Stocks Index Cautious ABI Sterling High Yield Sector High Income Bond Progressive SW Aviva Investors High Yield Bond Progressive Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

10 Pension Statistics 1 October 2018 RATINGS ABI Sterling Long Bonds Sector Pension Protector Balanced ABI Sterling Strategic Bond Sector Strategic Income Bond Balanced SW Aviva Investors Strategic Bond Balanced SW Henderson Fixed Interest Monthly Income Cautious Silver ABI UK All Companies Sector Environmental Adventurous Ethical Adventurous Formerly Lloyds TSB FTSE 100 Tracker Pension Fund Factsheet Formerly Lloyds TSB UK Equity Pension Fund Factsheet Fundamental Index UK Equity Adventurous Fundamental Low Index UK Equity Adventurous Multi-Manager UK Equity Focus Adventurous Multi-Manager UK Equity Growth Adventurous SW Artemis UK Select Adventurous SW BlackRock UK Adventurous SW BlackRock UK Special Situations Adventurous Neutral SW Fidelity Special Situations (2006) Adventurous Silver SW Invesco Perpetual High Income Adventurous Bronze SW Jupiter UK Growth Adventurous Neutral SW Schroder UK Plus Adventurous

11 RATINGS ABI UK All Companies Sector (continued) SW Schroder UK Mid 250 Specialist Neutral SW SSgA UK Equity Index Adventurous UK All Share Tracker Adventurous UK Equity Adventurous UK Equity Index* Adventurous ABI UK Direct Property Sector UK Opportunities Adventurous Formerly Lloyds TSB Property Pension Fund Factsheet Property Progressive ABI UK Equity Income Sector Multi-Manager UK Equity Income Adventurous SW Henderson Global Equity Income Adventurous SW Henderson UK Property Progressive SW Jupiter Income Adventurous Bronze SW Newton UK Income Adventurous SW Royal London UK Equity Income Adventurous Silver SW Schroder Income Maximiser Adventurous SW Threadneedle UK Social Bond Cautious SW Woodford Equity Income Adventurous Bronze ABI UK Gilts Sector Fixed Interest Balanced Formerly Lloyds TSB Fixed Interest Pension Fund Factsheet SW Schroder Gilt & Fixed Interest Balanced SW SSgA UK Conventional Gilts Over 15 Yrs Index Progressive UK Fixed Interest Tracker Cautious ABI UK Index-Linked Gilts Sector Indexed Stock Progressive

12 Pension Statistics 1 October 2018 RATINGS ABI UK Index-Linked Gilts Sector (continued) SW SSgA Index Linked Gilts All Stocks Index Progressive SW SSgA Index Linked Gilts Over 5 Yrs Index Progressive ABI UK Property Securities Sector UK Real Estate Adventurous ABI UK Smaller Companies Sector SW Artemis UK Smaller Companies Specialist Silver SW BlackRock UK Smaller Companies Specialist SW Liontrust UK Smaller Companies Specialist Bronze

13 RATINGS ABI Unclassified PM Cash Factsheet PM Consensus Factsheet PM Emerging Markets Equity Factsheet PM Index Linked Gilt Tracker Factsheet PM Managed Factsheet PM Property Factsheet PM Protection Factsheet PM Stock Exchange Equity Factsheet PM UK Equity Cap Factsheet PM UK Index Factsheet PM UK Long Corporate Bond Factsheet ABI Asia Pacific excluding Japan Equities Sector SW Fidelity Asia Specialist Bronze Formerly Lloyds TSB Pacific Basin Fund Factsheet SW Veritas Asian Specialist Silver ABI Commodity/Energy Sector JPM Natural Resources Specialist Bronze ABI Europe excluding UK Equities Sector European Adventurous Formerly Lloyds TSB European Growth Fund Factsheet Formerly Lloyds TSB German Growth Fund Factsheet SW Fidelity European Adventurous Bronze SW JPM Europe Dynamic (ex UK) Adventurous Bronze ABI Europe including UK Equities Sector SW Allianz European Equity Dividend Adventurous ABI Flexible Investment Formerly Lloyds TSB Equity Fund Factsheet

14 Life Statistics 1 October 2018 These life funds are available to existing customers who are already invested in a Scottish Widows product. New customers should contact their advisers or Scottish Widows for information on fund availability. RATINGS ABI Flexible Investment (continued) Formerly Lloyds TSB Options Equity Fund Factsheet SW Payden Absolute Return Bond Progressive ABI Global Emerging Markets Equities Sector Emerging Markets Specialist Fundamental Index Emerging Markets Equity Specialist Fundamental Low Index Emerging Markets Equity Specialist SW JPM Emerging Markets Specialist Bronze ABI Global Equities Sector Formerly Lloyds TSB Island Equity Fund Factsheet Formerly Lloyds TSB Worldwide Growth Fund Factsheet Fundamental Index Global Equity Adventurous Fundamental Low Index Global Equity Adventurous Global Equity Adventurous International Adventurous International Equity Tracker * Adventurous Multi-Manager International Equity Adventurous Opportunities Portfolio Progressive SW Fidelity 50:50 Special Situations Adventurous SW Fidelity Global Special Situations Adventurous Silver SW Newton Global Equity Adventurous

15 RATINGS ABI Global Fixed Interest Sector SW Invesco Perpetual Global Bond Balanced Bronze SW Newton International Bond Balanced Bronze ABI Global Property Sector Dynamic Property Progressive European Real Estate Adventurous Multi-Manager Global Real Estate Progressive SW Schroder Global Cities Real Estate Adventurous ABI Japan Equity Sector Formerly Lloyds TSB Japan Growth Fund Factsheet Japanese Specialist SW Schroder Tokyo Specialist Gold ABI Mixed Investment 0%-35% Shares Sector Defensive Managed Balanced ABI Mixed Investment 20%-60% Shares Sector Cautious Managed Balanced Diversified Assets Balanced SW Henderson Cautious Managed Balanced SW Invesco Perpetual Distribution Balanced Bronze SW Investec Cautious Managed Progressive Silver SW Jupiter Distribution Balanced Bronze Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

16 Life Statistics 1 October 2018 These life funds are available to existing customers who are already invested in a Scottish Widows product. New customers should contact their advisers or Scottish Widows for information on fund availability. RATINGS ABI Mixed Investment 40%-85% Shares Sector Consensus Progressive Formerly Lloyds TSB Homebuyers Fund Factsheet Formerly Lloyds TSB Island Pension Fund Factsheet Formerly Lloyds TSB Managed ex BHL Factsheet Formerly Lloyds TSB Managed Investment S1 Factsheet Formerly Lloyds TSB Managed Investment S2 Factsheet Formerly Lloyds TSB Options Managed Fund Factsheet Mixed Progressive SW BlackRock Managed Progressive SW Fidelity Managed Progressive SW Invesco Perpetual Managed Progressive SW Newton Managed Progressive SW Schroder Managed Progressive ABI Money Market Sector Cash Cautious Formerly Lloyds TSB Cash Fund Factsheet Formerly Lloyds TSB Options Money Fund Factsheet Formerly Lloyds TSB Money Fund Factsheet ABI North America Sector Formerly Lloyds TSB American Fund Factsheet North American Adventurous SW Artemis US Select Adventurous Bronze SW Fidelity American Adventurous

17 RATINGS ABI North America Sector (continued) SW Schroder US Smaller Companies Specialist Silver ABI Protected/Guaranteed Sector SafetyPlus Cautious ABI Specialist Sector Adventurous Solution Progressive Balanced Portfolio Balanced Balanced Solution Balanced Cautious Portfolio Cautious Cautious Solution Cautious Defensive Solution Cautious Discovery Solution Balanced Dynamic Solution Progressive Progressive Portfolio Progressive Strategic Solution Progressive SW Aviva Multi-Strategy ('AIMS') Target Income Balanced SW Baillie Gifford Multi Asset Growth Balanced SW Insight Global Absolute Return Balanced SW Investec Diversified Growth Balanced Neutral SW JPM Global Macro Balanced Balanced SW Nordea 1 GBP Diversified Return Progressive ABI Sterling Corporate Bond Sector Corporate Bond Cautious SW Fidelity MoneyBuilder Income Cautious Gold Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

18 Life Statistics 1 October 2018 These life funds are available to existing customers who are already invested in a Scottish Widows product. New customers should contact their advisers or Scottish Widows for information on fund availability. RATINGS ABI Sterling Corporate Bond Sector (continued) SW Invesco Perpetual Corporate Bond Cautious Gold ABI Sterling High Yield Sector High Income Bond Progressive SW Aviva Investors High Yield Bond Progressive ABI Sterling Strategic Bond Sector Strategic Income Bond Balanced SW Aviva Investors Strategic Bond Balanced SW Henderson Fixed Interest Monthly Income Balanced Silver ABI UK All Companies Sector Environmental Adventurous Ethical Adventurous Formerly Lloyds TSB Balanced Fund Factsheet Fundamental Index UK Equity Adventurous Fundamental Low Index UK Equity Adventurous Multi-Manager UK Equity Focus Adventurous Multi-Manager UK Equity Growth Adventurous SW Artemis UK Select Adventurous SW BlackRock UK Adventurous SW BlackRock UK Special Situations Adventurous Neutral SW Fidelity Special Situations (2006) Adventurous Silver SW Invesco Perpetual High Income Adventurous Bronze SW Jupiter UK Growth Adventurous Neutral SW Schroder UK Plus Adventurous SW Schroder UK Mid 250 Specialist Neutral

19 RATINGS ABI UK All Companies Sector (continued) UK Equity Adventurous UK Equity Index Adventurous UK Opportunities Adventurous ABI UK Direct Property Formerly Lloyds TSB Property ex BHL Fund Factsheet Property Progressive ABI UK Equity Income Sector Formerly Lloyds TSB Income S1 Factsheet Formerly Lloyds TSB Income S2 Factsheet Multi-Manager UK Equity Income Adventurous SW Henderson Global Equity Income Adventurous SW Henderson UK Property Progressive SW Jupiter Income Adventurous Bronze SW Newton UK Income Adventurous SW Royal London UK Equity Income Adventurous Silver SW Schroder Income Maximiser Adventurous SW Threadneedle UK Social Bond Cautious SW Woodford Equity Income Adventurous Bronze ABI UK Gilts Sector Fixed Interest Balanced Formerly Lloyds TSB Fixed Interest ex BHL Factsheet Formerly Lloyds TSB Fixed Interest ex TSB Factsheet SW Schroder Gilt & Fixed Interest Balanced ABI UK Index-Linked Gilts Sector Indexed Stock Balanced ABI UK Property Securities Sector UK Real Estate Adventurous

20 Life Statistics 1 October 2018 These life funds are available to existing customers who are already invested in a Scottish Widows product. New customers should contact their advisers or Scottish Widows for information on fund availability. RATINGS ABI UK Smaller Companies Sector Formerly Lloyds TSB Smaller Companies and Recovery Fund SW Artemis UK Smaller Companies Specialist Silver SW BlackRock UK Smaller Companies Specialist SW Liontrust UK Smaller Companies Specialist Bronze Risk Performance Analysis Source: Financial Express as at 30/09/15-30/09/18. Past performance is not a reliable indicator of future results. Ratings are based on the underlying fund where applicable. Ratings are supplied by the respective independent rating agencies and are the latest available. The risks associated with these funds are detailed in our fund guides which are available on request. and data is calculated on an annualised basis over a three year period. All other Risk Performance Analysis is calculated on a monthly basis over a three year period. Scottish Widows operates four different series of fund prices for its range of pension products. The fund series that applies will depend on the pension product chosen. We may change the selection of funds we make available. Please note that funds marked with an * are not available for new investments and we have therefore ceased to market them to new investors. Copyright , Inc. All Rights Reserved. Ratings source Scottish Widows.

21 Guide to terminology Each individual investor has their own attitude to risk and return and sets his/her investment objectives accordingly. The investor may then monitor whether these objectives are met on an ongoing basis. It is possible to calculate the return on his/her investments and then adjust that measure to take account of the risk that he/she has undertaken. The Financial Conduct Authority (FCA) analysed the extent to which past performance is of use to consumers in making investment decisions. It was concerned that if using past performance, advisers should consider it in conjunction with other factors, including price and risk, when making investment decisions. The FCA is continuing to review industry practice and what measures can best meet consumers' needs. ABI Sector The aim of the Association of British Insurers (ABI) is that all the funds in one sector are broadly comparable, making it easier for investors to compare like with like when deciding which fund is most suitable for them. The categories are not specifically designed to risk grade funds. They are designed to group together funds which are similar, so that they may be more easily compared on a like-for-like basis. While there are a number of ways to evaluate risk, the definitions shown below are used by Scottish Widows to help you decide the appropriate risk and investment approach for your client. Please be aware that we review the investment approach definitions and the investment approach for the funds regularly, so these may change. You can find information on current investment approaches and notification of any changes at investmentapproaches SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST These investments provide safety to the amount invested and can be expected to offer relatively low growth over the medium to longterm. They cannot fall in actual value, but can fall in 'real' value due to the effects of inflation. Please note that currently there are no funds within this investment approach. These investments are expected to have a relatively modest risk to the capital value and/or income. They have the potential to provide income, and/or, over the medium to longterm, relatively modest capital growth. The capital value may fluctuate, although some products may offer an element of capital protection. These investments carry a risk of loss to capital value but have the potential for capital growth and/or income over the medium to longterm. Typically they do not have any guarantees and will fluctuate in capital value. These investments are expected to have a relatively significant risk of loss to capital value, but with the potential of relatively more capital growth over the medium to longterm. They do not offer any guarantees and will fluctuate in capital value. These investments carry a relatively much higher risk of capital loss but with the potential for relatively higher capital growth over the medium to long-term. They may be subject to a considerable level of fluctuation in capital value. They do not offer any guarantees. These investments carry a very high risk of capital loss, but with the potential for a higher return over the long-term. They are very volatile and are only suitable for clients who can afford to, and are prepared to, risk the entire capital value. They do not offer any guarantees. INCREASING RISK INCREASING RISK SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST INVESTMENT PERIODS: WE CATEGORISE INVESTMENT PERIODS AS FOLLOWS: SHORT-TERM: UP TO 5 YEARS MEDIUM-TERM: BETWEEN 5 AND 10 YEARS LONG-TERM: OVER 10 YEARS

22 Ratings The is a quantitative assessment of a fund s past performance -both return and risk- as measured from one to five stars. It uses focused comparison groups - Categories- to better measure manager skill. The rating is also adjusted for all sales charges and exit fees to reflect the actual returns received by the investor. Within each category, awards 10% of funds one star, 22.5% of funds two stars, 35% three stars, 22.5% four stars, and 10% receive five stars. The is based on utility theory, which recognises that investors are more concerned about a possible poor outcome than an unexpectedly good outcome. The risk adjustment thus places greater emphasis on downward variations in returns. The rating rewards consistent performance and reduces the possibility of strong short-term performance masking the inherent risk of a fund. Each fund is rated over three-, five-, and ten-year periods depending on the length of its performance history. These ratings are then aggregated into the Rating, which is the rating published here. Further information on, its measures and fund performance data is available online at and Adviser Workstation. Ratings Ratings awarded are Gold, Silver, Bronze, Neutral, Negative, Not Ratable or Under Review. There are several key factors which lead to the final Rating determination These are: Strength of investment process and length of time it has been in place. Continuity of investment personnel. Investment style that has proven durable over time. Clearly defined investment objectives. Strong and consistent past performance record. Favourable risk adjustment returns. The Ratings are assigned to the underlying open-end funds. does not guarantee that a fund will perform in line with its Rating. Likewise, the Rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision. expressly disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Rating. Further information on Ratings definition is available from

23 Ratings s Crown Fund Ratings range from one to five, and are designed to help investors identify funds which have displayed superior performance in terms of stock pricing, consistency and risk control. FR s Methodology Crown Fund Ratings are calculated by building up a score. builds up a score based on analysing a fund's performance over the last three years. The score is made up of three components alpha, relative volatility, and consistently good performance*. Each part is calculated against a benchmark for the fund. (* See Risk Performance analysis section of this guide for further explanation of investment terms.) Calculating the score and assigning the Crown Fund Rating are grouped in ten sub-asset classes, and for each of the tests the raw scores are allocated from zero (worst) to 100 (best). Within each grouping, funds are given Crowns based on their total scores, using the following distribution: The top 10% of scores in each grouping five Crowns The next 15% - four Crowns The next 25% - three Crowns The next 25% - two Crowns The bottom 25% - one Crown Exclusions with short history are excluded for technical reasons. The following sectors are also excluded: Unclassified Personal Pensions Protected and Structured Products

24 Risk Performance Analysis (absolute risk) Risk is defined as the annualised standard deviation of the monthly returns of a fund over a three-year period. The standard deviation measures how far the actual fund returns have deviated from the fund's average return. The more a fund's returns have varied from the average, the higher the volatility. The volatility of a fund is partly driven by the asset types to which it is exposed. A fund exposed to equities will normally have a higher volatility than a fund with no equity exposure. A fund with high absolute risk exhibits greater uncertainty of return than a fund with low absolute risk. (relative risk) is a risk measure of a fund's sensitivity to movements in the market (or benchmark). As a risk measure it is driven by a Fund Manager's style bias - a high indicating a more aggressive stance whereas a low indicates a more cautious stance. is only really of use when calculated against a 'relevant' benchmark. If there is little correlation between the fund and the benchmark, then the resultant will be of little use as a risk measure. is retrospective, based on the historical position of a fund. It does not tell the investor anything about what the fund manager may do in the future. By definition, the market/benchmark has a of 1. A figure greater than 1 indicates that the fund will tend to outperform in a rising market and under underperform in a falling one, i.e. it is more volatile than the market. The reverse applies to a figure of less than 1. is a measure of the additional return that a fund (or fund manager) generates above the return expected from passively tracking the relevant asset class, sector or market. It takes the volatility of the fund and compares its risk-adjusted performance to the benchmark index. The excess return of the fund relative to the return of this benchmark index is known as the fund's alpha. A positive alpha of 1.0 means the fund has outperformance its benchmark by 1%, and conversely a negative alpha of 1.0 would mean an underperformance of 1.0%. While is a risk measure of a fund's sensitivity to 'market' or benchmark movements, is the excess return over and above that resulting from its benchmark risk. In other words, is the difference between the return you would expect from a fund, given its, and the return that it actually produced. If a fund returns more than its would predict, it has a positive, and if it returns less than the amount predicted by, the fund has a negative. A fund's return and its risk contribute to its value. In theory an investment manager exhibits a positive if he or she has superior stock picking or market timing skills, while a passive or index tracking fund would not generate any positive. Knowing the of any two funds will allow you to tell which fund has performed better according to this risk-adjusted measure. will allow the investor to get a quick feel for a fund's risk-adjusted performance relative to the peer group. A negative indicates underperformance. is often seen as a key measure of the 'added value' given by an active fund manager.

25 Risk Performance Analysis Ratio The 'risk-free' rate of return is assumed to be cash held on deposit in a bank or building society where it is subject to no risk conditions. Reward for taking on risk can only be given above this risk-free rate of return. The Ratio is a widely used risk-adjusted return measure. It is defined as the Relative Return divided by Absolute. It demonstrates the relationship between a fund's risk and its return. The underlying assumption is that a fund manager could invest in a riskless asset, therefore the return of the risk-free asset is deducted from the annualised average. This net return is then divided by the total risk. The higher a Ratio the better a portfolio's returns have been relative to the amount of absolute risk taken. A negative ratio indicates that the fund actually made less than the risk-free amount. R 2 Reflects how much of a fund's return is determined by the market/benchmark return. The maximum R 2 is 1. This means that 100% of a fund's movement is determined by the benchmark. A number progressively lower than 1 shows that the fund's return becomes more independent. Ratio The Ratio is a measure of how successful the fund manager has been at taking risk relative to the market/benchmark. A fund that has taken a low level of risk and achieved a higher return than the market/benchmark will have a high and positive information ratio. A fund manager that has lagged the market/benchmark in performance terms will have a negative Ratio.

26 Important note Safety Plus is a registered trademark of Scottish Widows Limited. Scottish Widows Limited. Registered in England and Wales No Registered Office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Scottish Widows Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number /18