Fund Aims and Facts PAGE 4 STAKEHOLDER FUNDS PAGE 6 EXECUTIVE PENSION PLAN FUNDS PAGE 8 PERSONAL PENSION PLAN FUNDS

Transcription

1 FUND AIMS AND FACTS

2 THIS BOOKLET SHOWS A SELECTION OF SCOTTISH WIDOWS FUNDS AVAILABLE TO LLOYDS BANK CUSTOMERS. IT DOES NOT REPRESENT THE FULL RANGE OF SCOTTISH WIDOWS FUNDS OR PRODUCTS AVAILABLE. SCOTTISH WIDOWS FUNDS EXCLUDING THE FORMER LLOYDS TSB FUNDS HAVE BEEN ASSIGNED TO INVESTMENT APPROACHES. THIS BOOKLET SHOULD BE READ IN CONJUNCTION WITH INVESTING WITH CONFIDENCE WHERE DETAILS OF THE INVESTMENT APPROACHES ARE GIVEN. AN AT A GLANCE GUIDE ON OUR INVESTMENT APPROACHES IS GIVEN AT THE END OF THIS BOOKLET ON PAGE 27. FOR ALL OEIC INFORMATION PLEASE REFER TO THE INDIVIDUAL KIIDS WHICH CAN BE FOUND AT

3 CONTENTS AIMS OF SCOTTISH WIDOWS FUNDS PAGE 4 STAKEHOLDER FUNDS PAGE 6 EXECUTIVE PENSION PLAN FUNDS PAGE 8 PERSONAL PENSION PLAN FUNDS PAGE 12 FLEXIBLE OPTIONS BOND FUNDS PAGE 16 FORMER LLOYDS TSB LIFE FUNDS PAGE 20 FORMER LLOYDS TSB PENSION FUNDS FACTS ON SCOTTISH WIDOWS FUNDS PAGE 22 STAKEHOLDER FUNDS EXECUTIVE PENSION PLAN FUNDS PAGE 23 PERSONAL PENSION PLAN FUNDS PAGE 24 FLEXIBLE OPTIONS BOND FUNDS PAGE 25 FORMER LLOYDS TSB LIFE FUND FACTS LIFE FUNDS PAGE 26 FORMER LLOYDS TSB LIFE FUND FACTS PENSION FUNDS PAGE 27 INVESTMENT APPROACHES AT A GLANCE 1

4 FUND INFORMATION The Scottish Widows unit-linked funds aim to provide long-term growth in the price of units. This is generated by a combination of capital growth as well as income that is added to the fund. A proportion of each unit-linked fund may be held in cash to provide liquidity or while awaiting suitable investments. The Scottish Widows unit-linked funds can invest in other unit-linked funds or in collective investment schemes (for example Open Ended Investment Companies (OEICs) or unit trusts) to achieve exposure to meet the stated fund aims. Some funds may use derivatives (contracts which have a value linked to the price of another asset) to help reduce risk or reduce cost, or to help generate extra capital or income. This is normally referred to as Efficient Portfolio Management (EPM). It is not intended that this will cause the risk profile of these funds to change, but using derivatives might not achieve the described outcomes and may result in greater fluctuations in the values of these funds. The funds may engage in securities lending. This is where a fund lends out some of its assets with an agreement that the borrower will return them after a limited period. The borrower pays a fee which is added to the fund after the costs associated with the lending have been deducted. The fund receives other assets and possibly a cash payment as security during the lending period for the assets lent. There is a risk that the borrower may be unable to return the fund s assets and, if this happens, the other assets would be sold. If the sale proceeds and any other payments due to the fund were not enough to replace the assets lent, the fund would go down in value. The individual aims of the Scottish Widows Life and Pension funds currently available are shown on pages Full terms and conditions are available on request from Scottish Widows. Charges, terms and limits may change. The value of an investment is not guaranteed and can go up and down depending on investment performance (and currency exchange rates where a fund invests overseas), and could fall below the amount invested. There may be restrictions on the amount you can invest in certain funds. Please contact us for details of any restrictions that apply. We may change the selection of funds that we make available. We may delay a request to sell your units in certain circumstances. The period of delay will not be more than six months if the units to be cancelled include units which relate to a fund which holds assets (directly or indirectly) in the form of real or heritable property. It will not be more than one month in all other cases. This may happen in exceptional circumstances where, for example, there is an unusually high demand for units to be cashed in. For more details please see the relevant Policy Provisions for your investment with us. ABI SECTOR INFORMATION ABI sectors are designed by the Association of British Insurers. They aim to group funds with similar characteristics and can help investors compare funds. However, they are not designed to reflect the risk level of funds. For more information about how we classify the risk level of the funds in this guide, please see page 27. The Mixed Investment Shares sectors reflect the maximum and minimum amount of a fund that can be invested in shares. Please note that fund managers may often invest at or near the maximum amount in shares. Funds in the Mixed Investment Shares sectors can hold a range of other investments in addition to shares (for example bonds, property and cash) and may use a range of different investment strategies. The Mixed Investment Shares sectors group together funds that are broadly similar (on the basis of their shares content) for comparison purposes. To give fund managers flexibility, the criteria for each sector overlaps. So funds may sometimes meet the requirements for more than one sector. UK shares are investments in companies quoted on the UK stock market. Overseas shares are investments in companies quoted on non-uk stock markets. 2

5 Where any of these general risks apply to a fund, this will be indicated beside the aims of the relevant fund in the next section. This will also show specific risks associated with each fund. LIFE AND PENSION FUNDS This fund invests in company shares (often referred to as equities ). Investing in company shares generally has the potential for higher capital growth over the longer term than investing in, say, corporate bonds and other fixed interest securities. However there might be considerable fluctuations in equity prices and there is a greater risk that the value of the investment will fall. FI Some of the securities in which this fund invests might default or their credit rating might fall. The value of those investments will usually fall should an issuer default or receive a reduced credit rating. Fluctuations in interest rates are likely to affect the value of the securities held by the fund. If long-term interest rates rise, the value of the units is likely to fall and vice versa. FIG This fund may invest more than 35% in government or public securities issued by a single issuer. There could be a risk, for example, that they can t repay the amount borrowed. If they don t repay, the value of the fund will fall. SC Exchange rate changes might cause the value of any overseas investment to go up or down. This fund invests in smaller companies whose shares tend to be bought and sold less frequently than larger companies. There may be large changes in the prices of their shares and their value could fall by large amounts. The price variations of smaller companies might be greater than those of large companies. PY This fund invests in property and land. This can be difficult to sell, so it may not be possible to cash in the investment when you want to. We may have to delay acting on your instructions to sell the investment. The value of property is generally a matter of a valuer s opinion rather than fact and values can go up and down. Property transactions tend to be larger and more complex than for other asset classes. As a result the proportion of cash held while awaiting suitable investment opportunities could be greater than for other funds. 3

6 LIFE AND PENSION FUNDS STAKEHOLDER FUND AIMS Cautious Cash The fund aims to provide long-term growth consistent with high levels of capital security by investing mainly in short-term securities. The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. UK Fixed Interest Tracker The fund aims to achieve long-term growth by investing in a portfolio that aims to track the performance of the UK fixed-interest market as represented by the FTSE-A UK Gilts All Stocks Index. The fund will invest mainly in UK Government fixed-interest securities. FI FIG Progressive Consensus Mixed The fund aims to achieve long-term growth by investing in a balanced portfolio of UK and overseas shares, fixed-interest stocks, index-linked stocks, and cash deposits. Investment in these assets is made through a range of index tracking funds, or where appropriate, through direct investment, again on an index-tracking basis. The percentage of the fund invested in each asset class will be based on the average amount invested in each class in accordance with a benchmark of UK balanced funds. The fund aims to achieve long-term growth by investing in a mixed portfolio of UK and overseas company shares, fixed-interest stocks, index-linked stocks, property and cash deposits. The fund is likely to invest mainly in company shares and property. FI FI 4

7 STAKEHOLDER FUND AIMS (CONTINUED) Adventurous Environmental European International UK All Share Tracker The fund aims to achieve long-term capital growth by investing in primarily UK companies which show a commitment to the protection and preservation of the natural environment. The fund may also invest in international companies applying environmental commitment. The companies are selected according to a range of negative environmental screening criteria. Negative screening means using a fund s agreed screening criteria to exclude undesirable investments, such as shares in companies whose practices may be harmful to the environment. The fund invests via the SWUTM European Growth OEIC Fund. The European Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Europe ex UK Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). The fund aims to achieve long-term growth by investing mainly in overseas company shares. The fund may invest in some UK-based companies with international interests. The fund can also invest in fixed interest securities. The fund aims to achieve long-term growth by investing in a portfolio that aims to track the performance of the UK Equity market as represented by the FTSE All Share Index. The fund will invest mainly in company shares. SP As the Fund invests predominantly in companies which are part of the MSCI Europe ex UK Index, performance, before charges, may fall and rise with the Index. FI 5

8 EXECUTIVE PENSION PLAN FUND AIMS Cautious Cash The fund aims to provide long-term growth consistent with high levels of capital security by investing mainly in short-term securities. The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. UK Fixed Interest Tracker The fund aims to achieve long-term growth by investing in a portfolio that aims to track the performance of the UK fixed-interest market as represented by the FTSE-A UK Gilts All Stocks Index. The fund will invest mainly in UK Government fixed-interest securities. FI FIG Progressive Consensus Mixed The fund aims to achieve long-term growth by investing in a balanced portfolio of UK and overseas shares, fixed-interest stocks, index-linked stocks, and cash deposits. Investment in these assets is made through a range of index tracking funds, or where appropriate, through direct investment, again on an index-tracking basis. The percentage of the fund invested in each asset class will be based on the average amount invested in each class in accordance with a benchmark of UK balanced funds. The fund aims to achieve long-term growth by investing in a mixed portfolio of UK and overseas company shares, fixed-interest stocks, index-linked stocks, property and cash deposits. The fund is likely to invest mainly in company shares and property. FI FI 6

9 EXECUTIVE PENSION PLAN FUND AIMS (CONTINUED) Adventurous Environmental European UK All Share Tracker The fund aims to achieve long-term capital growth by investing in primarily UK companies which show a commitment to the protection and preservation of the natural environment. The fund may also invest in international companies applying environmental commitment. The companies are selected according to a range of negative environmental screening criteria. Negative screening means using a fund s agreed screening criteria to exclude undesirable investments, such as shares in companies whose practices may be harmful to the environment. The fund invests via the SWUTM European Growth OEIC Fund. The European Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Europe ex UK Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). The fund aims to achieve long-term growth by investing in a portfolio that aims to track the performance of the UK Equity market as represented by the FTSE All Share Index. The fund will invest mainly in company shares. SP As the Fund invests predominantly in companies which are part of the MSCI Europe ex UK Index, performance, before charges, may fall and rise with the Index. 7

10 PERSONAL PENSION PLAN FUND AIMS Cautious Cash Fixed Interest Balanced The fund aims to provide long-term growth consistent with high levels of capital security by investing mainly in short-term securities. The fund aims to achieve long-term growth by investing mainly in UK fixed-interest securities. The fund may also invest in overseas fixedinterest securities. The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. FI FIG Indexed Stock The fund aims to achieve long-term growth by investing mainly in UK index-linked securities. FI FIG Progressive Consensus Mixed The fund aims to achieve long-term growth by investing in a balanced portfolio of UK and overseas shares, fixed-interest stocks, index-linked stocks, and cash deposits. Investment in these assets is made through a range of index tracking funds, or where appropriate, through direct investment, again on an index-tracking basis. The percentage of the fund invested in each asset class will be based on the average amount invested in each class in accordance with a benchmark of UK balanced funds. The fund aims to achieve long-term growth by investing in a mixed portfolio of UK and overseas company shares, fixed-interest stocks, index-linked stocks, property and cash deposits. The fund is likely to invest mainly in company shares and property. FI FI 8

11 PERSONAL PENSION PLAN FUND AIMS (CONTINUED) Adventurous Environmental European The fund aims to achieve long-term capital growth by investing in primarily UK companies which show a commitment to the protection and preservation of the natural environment. The fund may also invest in international companies applying environmental commitment. The companies are selected according to a range of negative environmental screening criteria. Negative screening means using a fund s agreed screening criteria to exclude undesirable investments, such as shares in companies whose practices may be harmful to the environment. The fund invests via the SWUTM European Growth OEIC Fund. The European Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Europe ex UK Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). SP As the Fund invests predominantly in companies which are part of the MSCI Europe ex UK Index, performance, before charges, may fall and rise with the Index. Global Equity The fund invests via the SWUTM Global Growth OEIC Fund. The Global Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI World Index or the MSCI Emerging Markets Index (the Indices ). The Fund seeks to deliver performance, before deduction of management fees, in excess of a blended return of the Indices, with a similar level of overall volatility, over the long term. Of the two Indices, the fund will invest almost exclusively in companies that are part of the MSCI World Index. The Fund may only take limited positions away from the Indices. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). International The fund aims to achieve long-term growth by investing mainly in overseas company shares. The fund may invest in some UK-based companies with international interests. The fund can also invest in fixed interest securities. FI 9

12 PERSONAL PENSION PLAN FUND AIMS (CONTINUED) Adventurous North American The fund invests via the SWUTM American Growth OEIC Fund. The American Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the S&P 500 Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). UK All Share Tracker The fund aims to achieve long-term growth by investing in a portfolio that aims to track the performance of the UK Equity market as represented by the FTSE All Share Index. The fund will invest mainly in company shares. UK Equity The fund invests via the SWUTM UK Growth OEIC Fund. The UK Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the FTSE All Share Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). 10

13 PERSONAL PENSION PLAN FUND AIMS (CONTINUED) Specialist Japanese The fund invests via the SWUTM Japan Growth OEIC Fund. The Japan Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Japan Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). As the Fund invests predominantly in companies which are part of the MSCI Japan Index, performance, before charges, may fall and rise with the Index. 11

14 FLEXIBLE OPTIONS BOND FUND AIMS Cautious Cash Cautious Portfolio Fixed Interest Balanced Balanced Portfolio With-Profits Income The fund aims to provide long-term growth consistent with high levels of capital security by investing mainly in short-term securities. The fund aims to achieve long-term growth by investing mainly in multi-manager funds. The fund will invest at least 80% in fixed interest security funds (investing mainly in high quality fixed interest securities, including corporate bonds), with a low proportion in equity funds. The fixed interest security and equity funds will invest in UK and overseas markets. The multi-manager funds are currently provided by a subsidiary of Aberdeen Asset Management and by the Russell Investment Group. Exposure to the multi-manager funds is currently provided through the Scottish Widows Cautious Portfolio OEIC Fund although investment may be made through other unitlinked funds, collective investment schemes, or directly to meet the stated fund aims. The fund aims to achieve long-term growth by investing mainly in UK fixed-interest securities. The fund may also invest in overseas fixedinterest securities. The fund aims to achieve long-term growth by investing mainly in multi-manager funds. The fund will invest in a balance of equity and fixed interest security funds (these fixed interest security funds will invest mainly in high quality fixed interest securities, including corporate bonds). The equity and fixed interest security funds will invest in UK and overseas markets. The multi-manager funds are currently provided by a subsidiary of Aberdeen Asset Management and by the Russell Investment Group. Exposure to the multi-manager funds is currently provided through the Scottish Widows Balanced Portfolio OEIC Fund although investment may be made through other unit-linked funds, collective investment schemes, or directly to meet the stated fund aims. The aim of the With-Profits Income Fund is to deliver income to you from the beginning of your investment while still aiming to maintain the long-term value of the investment. The core assets of this fund are invested mainly in corporate bonds and property, with some cash deposits. There are also some valuable guarantees built into the fund. The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. FI FI FIG FI The value of units isn t directly linked to the market value of the investments. What you get back from investing in a With-Profits Fund depends mainly on the investment profits and losses of the fund and the decisions we make about their distribution, and is only guaranteed in certain circumstances. If you cash in at other times, we may apply market value reductions. You could get back less than you invested. Please note that future bonus rates are not guaranteed. Please read the With-Profits guide for more details. 12

15 FLEXIBLE OPTIONS BOND FUND AIMS (CONTINUED) Progressive Consensus Mixed Opportunities Portfolio Progressive Portfolio With-Profits Growth The fund aims to achieve long-term growth by investing in a balanced portfolio of UK and overseas shares, fixed-interest stocks, index-linked stocks, and cash deposits. Investment in these assets is made through a range of index tracking funds, or where appropriate through direct investment, again on an index-tracking basis. The percentage of the fund invested in each asset class will be based on the average amount invested in each class in accordance with a benchmark of UK balanced funds. The fund aims to achieve long-term growth by investing in a mixed portfolio of UK and overseas company shares, fixed-interest stocks, index-linked stocks, property and cash deposits. The fund is likely to invest mainly in company shares and property. The fund aims to achieve long-term growth by investing mainly in multi-manager funds. The fund will invest at least 80% in equity funds with a low proportion in fixed interest security funds (the fixed interest security funds will invest mainly in high quality fixed interest securities, including corporate bonds). The equity and fixed interest security funds will invest in UK and overseas markets. The multi-manager funds are currently provided by a subsidiary of Aberdeen Asset Management and by the Russell Investment Group. Exposure to the multi-manager funds is currently provided through the Scottish Widows Opportunities Portfolio OEIC Fund although investment may be made through other unit linked funds, collective investment schemes, or directly to meet the stated fund aims. The fund aims to achieve long-term growth by investing mainly in multi-manager funds. The fund will invest up to a maximum of 85% in equity funds with a moderate proportion in fixed interest security funds (the fixed interest security funds will invest mainly in high quality fixed interest securities, including corporate bonds). The equity and fixed interest security funds will invest in UK and overseas markets. The multi-manager funds are currently provided by a subsidiary of Aberdeen Asset Management and by the Russell Investment Group. Exposure to the multi-manager funds is currently provided through the Scottish Widows Progressive Portfolio OEIC Fund although investment may be made through other unit-linked funds, collective investment schemes, or directly to meet the stated fund aims. The aim of the With-Profits Growth Fund is to help your investments to grow. The core assets of the fund are invested mainly in UK and overseas equities and property, together with some bonds and, where appropriate, cash deposits. There are also some valuable guarantees built into the fund. FI FI FI FI The value of units isn t directly linked to the market value of the investments. What you get back from investing in a With-Profits Fund depends mainly on the investment profits and losses of the fund and the decisions we make about their distribution, and is only guaranteed in certain circumstances. If you cash in at other times, we may apply market value reductions. You could get back less than you invested. Please note that future bonus rates are not guaranteed. Please read the With-Profits guide for more details. 13

16 FLEXIBLE OPTIONS BOND FUND AIMS (CONTINUED) Adventurous Environmental European Global Equity The fund aims to achieve long-term capital growth by investing in primarily UK companies which show a commitment to the protection and preservation of the natural environment. The fund may also invest in international companies applying environmental commitment. The companies are selected according to a range of negative environmental screening criteria. Negative screening means using a fund s agreed screening criteria to exclude undesirable investments, such as shares in companies whose practices may be harmful to the environment. The fund invests via the SWUTM European Growth OEIC Fund. The European Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Europe ex UK Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). The fund invests via the SWUTM Global Growth OEIC Fund. The Global Growth OEIC Fund aim is: To achieve long term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI World Index or the MSCI Emerging Markets Index (the Indices ). The Fund seeks to deliver performance, before deduction of management fees, in excess of a blended return of the Indices, with a similar level of overall volatility, over the long term. Of the two Indices, the fund will invest almost exclusively in companies that are part of the MSCI World Index. The Fund may only take limited positions away from the Indices. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). SP As the Fund invests predominantly in companies which are part of the MSCI Europe ex UK Index, performance, before charges, may fall and rise with the Index. As the Fund invests predominantly in companies which are part of the MSCI World Index or the MSCI Emerging Markets Index, performance, before charges, may fall and rise with the Indices. 14

17 FLEXIBLE OPTIONS BOND FUND AIMS (CONTINUED) Adventurous International UK Equity The fund aims to achieve long-term growth by investing mainly in overseas company shares. The fund may invest in some UK-based companies with international interests. The fund can also invest in fixed interest securities. The fund invests via the SWUTM UK Growth OEIC Fund. The UK Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the FTSE All Share Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). FI 15

18 FORMER LLOYDS TSB LIFE FUNDS The aims of the twenty four former Lloyds TSB Life (life) funds are shown below. American Series 2 The fund invests via the SWUTM American Growth OEIC Fund. The American Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the S&P 500 Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). Balanced Series 2 Cash Series 2 The fund invests via the SWUTM UK Growth OEIC Fund. The UK Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the FTSE All Share Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). When investment conditions are uncertain, this fund provides security through investment in interest-bearing deposits. FI The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. Equity Series 2 To provide medium term capital growth from a worldwide spread of equity investments, through investing in other Lloyds TSB Life Funds. European Growth Series 2 to provide long-term capital growth from a portfolio of equities in continental European companies, including UK. Fixed Interest Series 2 to provide a steady return from a portfolio of UK Gilts and fixed interest securities in both the UK and overseas. FI Fixed Interest ex TSB to provide a steady return from a portfolio of UK Gilts and fixed interest securities in both the UK and overseas. FI German Growth Series 2 to provide long-term growth from a portfolio of securities in German companies. 16

19 FORMER LLOYDS TSB LIFE FUNDS (CONTINUED) Homebuyer Income Series 2 To provide medium to long-term growth with defensive qualities through investment in a combination of equities, fixed interest, property and cash, through investing in other Lloyds TSB Life Funds. The fund invests via the SWUTM UK Equity Income OEIC Fund. The UK Equity Income OEIC Fund aim is: To provide above average income, along with potential long-term capital growth by investing predominantly in a portfolio of companies which are part of the FTSE All Share Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. Companies will be selected which have the potential to provide higher than average dividend yields* and to achieve long-term capital growth. The Fund seeks to hold more in these companies in comparison to the Index. Therefore, while the Fund will invest in a large number of companies in common with the Index, the amount held in any one company may be significantly different to the Index. The Fund is limited in the extent to which it can hold more (overweight) or less (underweight) in sectors** relative to the Index, but it aims to hold more in sectors which are expected to provide a higher than average dividend yield. * The dividend yield is calculated by dividing the annual dividend paid in respect of a share by its share price. * FI FI Island Equity The aim of this fund is to shadow the Offshore Investment Fund Island Equity Class. Japan Growth Series 2 to achieve long-term capital growth from a portfolio of securities in Japanese companies. Managed Managed Investment Series 2 To provide medium to long-term capital growth with defensive qualities through investment in a combination of equities, fixed interest, property and cash, through investing in other Lloyds TSB Life Funds. to provide steady consistent long-term capital growth from a broadly spread balanced portfolio which comprises predominantly UK equities, but also includes overseas equities, UK and overseas fixed interest securities, collective investment schemes and UK property. FI FI 17

20 FORMER LLOYDS TSB LIFE FUNDS (CONTINUED) Managed ex TSB Money To provide medium to long-term capital growth with defensive qualities through investment in a combination of equities, property and fixed interest securities. to guarantee that the price of units will not fall by investing in the money markets. FI Options Equity To provide medium to long-term capital growth from a worldwide spread of equity investments, through investing in other Lloyds TSB Life Funds. Options Managed Options Money Pacific Basin Series 2 Property Series 2 Property ex TSB To provide medium to long-term growth with defensive qualities through investment in a combination of equities, fixed interest, property and cash, through investing in other Lloyds TSB Life Funds. to guarantee that the price of units will not fall by investing in the money markets. The fund invests via the SWUTM Pacific Growth OEIC Fund. The Pacific Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI AC Asia Pacific ex Japan Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). to provide long-term capital growth from a portfolio of property in the industrial, retail and office sectors. To obtain the best possible return, commensurate with acceptable risk while retaining a high degree of diversification. To pursue a policy of active management and to achieve added value through lease structuring, refurbishment, selective acquisition and disposal of properties and development (consistent with risk and portfolio size). FI The Fund invests in emerging markets whose stockmarkets are generally less well regulated than those in the UK. This may result in a greater risk that the value of units might go down. The investment in these markets might be bought and sold infrequently therefore resulting in large changes in their prices. PY PY Smaller Companies & Recovery Series 2 to provide consistent capital growth from a portfolio of UK smaller companies which have a minimum market Feb 1980 capitalisation of 1 million and those with recovery potential. SC 18

21 FORMER LLOYDS TSB LIFE FUNDS (CONTINUED) Worldwide Growth Series 2 The fund invests via the SWUTM Global Growth OEIC Fund. The Global Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI World Index or the MSCI Emerging Markets Index (the Indices ). The Fund seeks to deliver performance, before deduction of management fees, in excess of a blended return of the Indices, with a similar level of overall volatility, over the long term. Of the two Indices, the Fund will invest almost exclusively in companies that are part of the MSCI World Index. The Fund may only take limited positions away from the Indices. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). 19

22 FORMER LLOYDS TSB PENSION FUNDS The aims of the eleven former Lloyds TSB Life (pension) funds are shown below. American The fund invests via the SWUTM American Growth OEIC Fund. The American Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the S&P 500 Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). Cash When investment conditions are uncertain, this fund provides security through investment in interest bearing deposits. The fund can invest in high-quality, mostly short-term debt instruments such as fixed deposits, certificates of deposit, commercial paper and floating rate notes. It carries a relatively modest risk to capital. European The fund invests via the SWUTM European Growth OEIC Fund. The European Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI Europe ex UK Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). 20

23 FORMER LLOYDS TSB PENSION FUNDS (CONTINUED) Far Eastern The fund invests via the SWUTM Pacific Growth OEIC Fund. The Pacific Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the MSCI AC Asia Pacific ex Japan Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). The Fund invests in emerging markets whose stockmarkets are generally less well regulated than those in the UK. This may result in a greater risk that the value of units might go down. The investment in these markets might be bought and sold infrequently therefore resulting in large changes in their prices. Fixed Interest to provide a steady return from a portfolio of UK Gilts and fixed interest stocks in both the UK and overseas. FI FTSE 100 to provide long-term capital growth by tracking those companies that make up the FTSE 100 Index. Guaranteed Deposit to provide long-term capital growth through a combination of capital appreciation and reinvestment of income from a spread of fixed interest securities, mainly UK Gilts. It is normally recommended that this fund is only used at the end of a pension s term to protect capital growth. FI Island Pension Managed Property to maximise long-term growth together with an element of security through a broadly spread portfolio including property, equity and fixed interest investments. to provide a steady consistent long-term capital growth from a broadly spread balanced portfolio which comprises predominantly UK equities, but also includes overseas equities, UK and overseas fixed interest securities, unit trusts and UK property. to provide long-term capital growth from a portfolio of property in the industrial, retail and office sectors. FI FI PY UK Equity The fund invests via the SWUTM UK Growth OEIC Fund. The UK Growth OEIC Fund aim is: To achieve long-term capital growth by investing predominantly in a portfolio of companies which are part of the FTSE All Share Index (the Index ). The Fund seeks to deliver performance, before deduction of management fees, in excess of the Index with a similar level of overall volatility, over the long term. The Fund may only take limited positions away from the Index. This means there are limitations on the extent to which the Fund s investment in various sectors* may differ to the Index. These limited positions can be more than is held in the Index (overweight) or less than is held in the Index (underweight). 21

24 STAKEHOLDER FUND FACTS Fund Launch Date ABI Sector Cautious Cash July 1981 Money Market UK Fixed Interest Tracker April 2001 UK Gilts Progressive Consensus March 1998 Mixed Investment 40%-85% Shares Mixed July 1981 Mixed Investment 40%-85% Shares Adventurous Environmental May 2000 UK All Companies European November 1998 Europe Ex UK Equities International July 1981 Global Equities UK All Share Tracker April 2001 UK All Companies EXECUTIVE PENSION PLAN FUND FACTS Fund Launch Date ABI Sector Cautious Cash July 1981 Money Market UK Fixed Interest Tracker April 2001 UK Gilts Progressive Consensus March 1998 Mixed Investment 40%-85% Shares Mixed July 1981 Mixed Investment 40%-85% Shares Adventurous Environmental May 2000 UK All Companies European November 1998 Europe Ex UK Equities UK All Share Tracker April 2001 UK All Companies 22

25 PERSONAL PENSION PLAN FUND FACTS Fund Launch Date ABI Sector Cautious Cash July 1981 Money Market Fixed Interest July 1981 UK Gilts Balanced Indexed Stock April 1982 UK Index-Linked Gilts Progressive Consensus March 1998 Mixed Investment 40%-85% Shares Mixed July 1981 Mixed Investment 40%-85% Shares Adventurous Environmental May 2000 UK All Companies European November 1998 Europe Ex UK Equities Global Equity May 2000 Global Equities International July 1981 Global Equities North American November 1998 North America Equities UK All Share Tracker April 2001 UK All Companies UK Equity July 1981 UK All Companies Specialist Japanese November 1998 Japan Equities 23

26 FLEXIBLE OPTIONS BOND FUND FACTS Fund Launch Date ABI Sector Cautious Cash July 1981 Money Market Cautious Portfolio January 2002 Specialist Fixed Interest July 1981 UK Gilts Balanced Balanced Portfolio January 2002 Specialist With-Profits Income July 2002 n/a Progressive Consensus March 1998 Mixed Investment 40%-85% Shares Mixed July 1981 Mixed Investment 40%-85% Shares Opportunities Portfolio January 2002 Global Equities Progressive Portfolio January 2002 Specialist With-Profits Growth July 2002 n/a Adventurous Environmental May 2000 UK All Companies European November 1998 Europe Ex UK Equities Global Equity May 2000 Global Equities International July 1981 Global Equities UK Equity July 1981 UK All Companies 24

27 FORMER LLOYDS TSB LIFE FUND FACTS LIFE FUNDS Fund Launch Date ABI Sector American Series 2 November 1980 North America Equities Balanced Series 2 October 1978 UK All Companies Cash Series 2 October 1978 Money Market Equity Series 2 March 1983 Flexible Investment European Growth Series 2 November 1986 Europe Ex UK Equities Fixed Interest Series 2 October 1978 UK Gilts Fixed Interest March 1983 UK Gilts German Growth Series 2 October 1985 Europe Ex UK Equities Homebuyer April 1987 Mixed Investment 40%-85% Shares Income Series 2 September 1978 UK Equity Income Island Equity January 1995 Global Equities Japan Growth Series 2 November 1985 Japan Equities Managed ex TSB March 1983 Mixed Investment 40%-85% Shares Managed Investment Series 2 October 1978 Mixed Investment 40%-85% Shares Managed September 1975 Mixed Investment 40%-85% Shares Money March 1983 Money Market Options Equity January 1990 Flexible Investment Options Managed January 1990 Mixed Investment 40%-85% Shares Options Money January 1990 Money Market Pacific Basin Series 2 November 1981 Asia Pacific Ex Japan Equities Property Series 2 October 1978 UK Direct Property Property ex TSB March 1983 UK Direct Property Smaller Cos & Recovery Series 2 February 1980 UK Smaller Companies Worldwide Growth Series 2 October 1978 Global Equities 25

28 FORMER LLOYDS TSB LIFE FUND FACTS PENSION FUNDS Fund Launch Date ABI Sector American January 1988 North America Equities Cash December 1987 Money Market European January 1988 Europe Ex UK Equities Far Eastern January 1988 Asia Pacific Ex Japan Equities Fixed Interest November 1987 UK Gilts FTSE 100 July 1995 UK All Companies Guaranteed Deposit November 1984 Money Market Island Pension March 1987 Mixed Investment 40%-85% Shares Managed November 1987 Mixed Investment 40%-85% Shares Property February 1988 UK Direct Property UK Equity January 1988 UK All Companies 26

29 INVESTMENT APPROACHES AT A GLANCE While there are a number of ways to evaluate risk, Scottish Widows uses the following definitions to help you decide on the appropriate investment approach. 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 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. 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 long-term. 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 long-term. 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 longterm. 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. SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST INCREASING RISK 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. 27