SW WEALTH FUNDS AVAILABLE THROUGH THE INVESTMENT PORTFOLIO BOND AND THE RETIREMENT ACCOUNT

Transcription

1 SW WEALTH FUNDS AVAILABLE THROUGH THE INVESTMENT PORTFOLIO BOND AND THE RETIREMENT ACCOUNT

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3 SW s PAGE 2 WHY INVEST IN THE SW WEALTH FUNDS? PAGE 3 THE STRUCTURE OF THE SW WEALTH FUNDS PAGE 4 ASSET TYPES PAGE 5 ABSOLUTE RETURN FUNDS PAGE 6 TECHNICAL DETAILS OF THE SW WEALTH FUNDS STRUCTURE PAGE 8 FUND CHARGES PAGE 10 OUR INVESTMENT APPROACHES PAGE 12 SPECIFIC RISK FACTORS YOU NEED TO KNOW ABOUT THE SW WEALTH FUNDS PAGE 13 THE SW WEALTH FUNDS WEALTH DEFENSIVE FUND PAGE 14 WEALTH CAUTIOUS FUND PAGE 15 WEALTH DISCOVERY FUND PAGE 16 WEALTH BALANCED FUND PAGE 17 WEALTH PROGRESSIVE FUND PAGE 18 WEALTH DYNAMIC FUND PAGE 19 WEALTH ADVENTUROUS FUND PAGE 20 WEALTH HIGHER YIELD DISCOVERY FUND (PENSION ONLY) PAGE 21 WEALTH HIGHER YIELD BALANCED FUND PAGE 23 WEALTH LIQUIDITY FUND (LIFE ONLY) 1

4 SW s WHY INVEST IN THE SW WEALTH FUNDS? The SW s are a range of seven growth funds, two higher yield funds and also a fund which invests in cash type assets known as the SW Liquidity. The majority of the SW s are available to the Investment Portfolio Bond and the Retirement Account. The exceptions are the SW Liquidity (only available through the Investment Portfolio Bond) and the SW Higher Yield Discovery (only available through the Retirement Account). The Liquidity is a single manager fund investing in short term cash based investments. The descriptions and explanations in this brochure apply to the growth and higher yield SW s unless stated otherwise. The value of your investment and any income from it is not guaranteed and can go down as well as up. You may not get back the original amount you invested. Pensions are a long-term investment. The retirement benefits you receive from your pension plan will depend on a number of factors including the value of your plan when you decide to take your benefits which isn t guaranteed, and can go down as well as up. The value of your plan could fall below the amount(s) paid in. A range of funds to suit your individual needs and investment approaches. The different SW s reflect varying attitudes to risk allowing you to select the fund which best fits your approach to risk and reward. Multi-manager investment approach. The multi-manager approach aims to add value by selecting a team of specialists within their field who together can perform more effectively than a single investment specialist. Investing with many managers rather than one can spread risk. Occurrences such as staff departures, company mergers, acquisitions and other disruptions to the investment management activities can t be avoided the multi-manager approach may help to dilute any effect as there is more than one Manager within the fund. A wide range of asset classes and underlying funds. The SW s have a multi-asset approach which gives the Managers access to a wide range of assets such as commodities, equities and fixed interest securities. In addition different investment strategies are used, for example the SW s give access to Absolute Return funds. This means that they have more flexibility in aiming to achieve the objectives of the fund. 2

5 SW s THE STRUCTURE OF THE SW WEALTH FUNDS Diversification of your investment is important as it can help to spread risk. Diversification means ensuring that investments are spread across different asset classes or strategies. Effective diversification means looking at the behaviour of asset classes and selecting those that are thought to perform differently in any particular set of market conditions. Each of the growth and higher yield s invests in a combination of two Investment Portfolio Service (IPS) OEIC funds. The splits for all of the funds are as at the 3rd April 2018 are shown below. The Liquidity wholly invests in the Aberdeen Global Liquidity. The IPS funds and the Aberdeen Global Liquidity are managed by a subsidiary of Aberdeen Standard Investments. Please note that these percentages may change and we may also change the selection of funds that we make available and restrict the amount you can invest in them. IPS Income Portfolio OEIC (Share Class X) IPS Higher Income Aberdeen Global Portfolio OEIC (Share Class X) Liquidity 98% 71.70% 50.0% 40.8% 21.1% 7.2% 2% 35.0% 40.0% 100% Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous Higher Yield Discovery Higher Yield Balanced 2% 28.30% 50.0% 59.2% 78.9% 92.8% 98% 65.0% 60.0% Liquidity IPS Growth Portfolio OEIC (Share Class X) An Open Ended Investment Company (OEIC) is a type of Collective Investment Scheme where a number of investors are able to pool their investments and have them professionally managed. An OEIC gets bigger and more shares are created as more people invest. The fund shrinks and shares are cancelled as people withdraw their money. STRATEGIC ASSET ALLOCATION AND TACTICAL ASSET ALLOCATION As well as being the fund manager for the ten SW s, Aberdeen Standard Investments ( ASI ) is also the manager of the three IPS OEIC funds. These three OEIC funds are multi-asset, multi-manager funds. They invest in funds managed by ASI and other specialists from outside the Lloyds Banking Group, identified by ASI s experienced Multi-Manager Team. Each of the growth and higher yield s has a Strategic Asset Allocation (SAA), blending asset types to provide returns in line with a specific level of risk. For example lower risk funds will typically have a higher weighting in bonds and higher risk funds will typically have a higher weighting in UK and international equities. The IPS OEIC funds are combined as shown above to give the nine risk rated s. Scottish Widows will carry out an annual review of the SAA to ensure that they are as close as possible to the best mix of assets for the permitted level of risk. As well as SAA, ASI also uses Tactical Asset Allocation (TAA), which aims to enhance long-term total returns by capitalising on short term opportunities, identified by a skilled team of specialists who research and understand specific sectors and asset types. TAA changes are subject to strict controls to ensure that excessive over or underweight positions (holding more or less of a particular asset type than the SAA outlines) versus the SAA do not occur as this could potentially alter the risk profile of the fund. The splits shown above allow the SW s to invest, via the IPS OEIC funds, into a blend of asset classes and investment strategies including bonds (gilts, corporate bonds and high yield bonds), equities (UK and international), property, commodities, cash and absolute return funds. General explanations of these asset types and Absolute Return funds are on pages 4 and 5 of this brochure. 3

6 SW s ASSET TYPES Below are general descriptions of the main asset types used within the SW s. BONDS Bonds, also known as fixed interest securities or fixed income securities, are essentially loans, i.e. an agreement between a borrower and a lender. Bonds are the means by which companies, governments or local authorities borrow money directly from the public. They generally have the following characteristics: a fixed investment term; the issuer of the bond agrees to make interest payments, normally every six months during the term; at the end of the term the issuer should repay the original loan. Please remember that when bonds are included in an investment fund the fund will include many different bonds with different interest rates and terms. The SW s don t have a fixed term. EQUITIES Equities are shares in a company listed on a stock exchange. Equities are also known as stocks, shares or securities. Once you invest in a company s shares you become a shareholder. The shareholders of a company are effectively the company s owners and usually have the right to vote on important matters concerning the company. Equity investments may offer a share in the profits of the company in the form of dividend payments. A dividend is simply the sum of money that a company decides to divide among its shareholders. COMMODITIES Commodities are physical goods. These can include precious metals such as gold, non-precious metals such as iron, agricultural products such as corn and energy products such as oil and natural gas. The SW s currently invest in commodities through Exchange Traded s which are a type of investment which track the performance of underlying shares or indices. PROPERTY & PROPERTY SHARES Property investment funds can invest in commercial property (offices, shops, warehouses, factories, etc.) and land. managers may also develop the properties held within their fund. Returns on the funds are determined by changes in the market value of properties held by the fund, and any rental income. This is known as direct or bricks and mortar investment. managers can also invest in property shares. These are shares in companies that generate returns from their property activities, such as rental income from their property portfolios or capital gains from property management and development. This is known as indirect property investment. Property is a less liquid asset than other assets such as fixed interest securities or equities and values could be affected if properties need to be sold in a short timescale. Property valuation is generally a matter of judgement by an independent valuer rather than fact and values can go up or down. 4

7 SW s ABSOLUTE RETURN FUNDS Absolute Return funds are a form of alternative investment strategy, typically targeting a higher rate of return than cash investments and aiming to provide positive returns regardless of market conditions over a specific time period (such as 12 months). These funds can invest in a wide range of assets and use different strategies. For example, Absolute Return funds can use strategies which mean they can benefit when an asset price falls as well as strategies which mean they can benefit if assets rise in value. They can use derivatives, which are agreements to buy or sell assets in the future, or can borrow money which is then used to generate returns. Riskier investment strategies increase the possibility for loss as well as profit in the short term but overall have potential to provide a profit over the long term. Please remember that investments in Absolute Return funds are at risk, and there is no guarantee that these funds will deliver positive returns over the specific, or any, time period. 5

8 SW s TECHNICAL DETAILS OF THE SW WEALTH FUNDS STRUCTURE The s invest in a number of asset types (see pages 2 to 5) and are risk rated according to the Scottish Widows investment approaches which apply to them. The risk spectrum ranges from the Secure investment approach at the lowest end to the Specialist investment approach at the highest end. There are currently no funds within the Secure or Specialist investment approaches. For further information, please see pages 10 and 11. The charts below show the relative risk/return characteristics of the s and are intended for illustrative purposes only. The table below each chart shows the Tactical Asset Allocation of each as at the 2nd March The two Higher Yield s have an income based aim and to help achieve this have a higher allocation to high yield bonds in comparison to the seven Growth s. The Higher Yield s are therefore displayed on a separate chart on page 7. GROWTH FUNDS 8.80% 4.25% 5.54% 1.03% WEALTH DEFENSIVE FUND 75.78% 4.60% WEALTH CAUTIOUS FUND 8.14% 4.35% 17.41% 7.57% 3.48% 59.06% WEALTH DISCOVERY FUND 7.43% 4.45% 29.98% 14.49% 2.30% CAUTIOUS CAUTIOUS BALANCED BALANCED PROGRESSIVE PROGRESSIVE ADVENTUROUS Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous Absolute Return Strategies 4.60% 3.48% 2.30% 1.88% 0.97% 0.33% 0.09% of which Fixed Interest Based 4.60% 3.48% 2.30% 1.88% 0.97% 0.33% 0.09% Fixed Interest 75.78% 59.06% 41.35% 35.02% 21.39% 11.90% 8.32% of which Gilts 15.08% 12.75% 10.29% 9.41% 7.51% 6.19% 5.69% of which Corporate Bonds 55.48% 42.01% 27.75% 22.66% 11.68% 4.04% 1.15% of which High Yield Bonds 5.22% 4.29% 3.31% 2.96% 2.20% 1.68% 1.48% UK Equities 1.03% 7.57% 14.49% 16.96% 22.29% 26.00% 27.40% International Equities 5.54% 17.41% 29.98% 34.47% 44.15% 50.89% 53.43% Property 4.25% 4.35% 4.45% 4.49% 4.57% 4.63% 4.65% Cash 8.80% 8.14% 7.43% 7.17% 6.63% 6.25% 6.11% Total % % % % % % % References above to high yield bonds are to fixed interest securities which carry a higher than average risk. Totals above may not equal 100% due to rounding % Source: Aberdeen Standard Investments as at 02/03/2018. WEALTH BALANCED FUND 7.17% 4.49% 34.47% 1.88% 16.96% 35.02% WEALTH PROGRESSIVE FUND 6.63% 0.97% 4.57% 44.15% 21.39% 22.29% WEALTH DYNAMIC FUND 6.25% 0.33% 4.63% 50.89% 11.90% 26.00% WEALTH ADVENTUROUS FUND 6.11% 4.65% 53.43% 0.09% 8.32% 27.40% 6

9 SW s HIGHER YIELD FUNDS WEALTH HIGHER YIELD DISCOVERY FUND WEALTH HIGHER YIELD BALANCED FUND LIQUIDITY FUNDS WEALTH LIQUIDITY FUND 4.24% 0.00% 4.95% 4.38% 0.00% 4.92% 6.00% 0.70% 22.99% 51.55% 25.41% 48.11% 23.80% 47.00% 16.28% 17.17% 11.90% 10.60% BALANCED BALANCED CAUTIOUS Source: Aberdeen Standard Investments as at 02/03/2018. Higher Yield Discovery Higher Yield Balanced Absolute Return Strategies 0.00% 0.00% of which Fixed Interest Based 0.00% 0.00% Fixed Interest 51.55% 48.11% of which Gilts 10.33% 9.95% of which Corporate Bonds 31.52% 29.10% of which High Yield Bonds 9.70% 9.06% UK Equities 16.28% 17.17% International Equities 22.99% 25.41% Property 4.95% 4.92% Cash 4.24% 4.38% Total % % Source: Aberdeen Standard Investments as at 31/01/2018. Liquidity Certificate of Deposit 47.00% Commercial Paper 10.60% Floating Rate Notes 11.90% Time Deposits 23.80% Call Account 6.00% Corporate Bonds 0.70% Total % Totals above may not equal 100% due to rounding. References above to high yield bonds are to fixed interest securities which carry a higher than average risk. Totals above may not equal 100% due to rounding. 7

10 SW s FUND CHARGES LIFE FUNDS These funds are available through the Investment Portfolio Bond. There is an Annual Management Charge (AMC) of 0.7% of the fund value which is deducted daily from the fund price. This covers fund management, administration and marketing. There is also a regular charge of 0.1% per annum which is deducted by unit cancellation. The sum of the AMC and the regular charge is the Yearly Management Charge (YMC). The YMC for each fund does not include the additional expenses for operating the fund. These additional expenses are added to the YMC to form a Total Yearly Charge. The table below shows the current estimated levels of these additional expenses in the column headed Other Expenses. These include, for example, trustee s fees, auditor s fees and regulator s fees. The allowance for these Other Expenses can change on a regular basis. Name YMC Other Expenses Total Yearly Charge Defensive 0.800% 0.560% 1.360% Cautious 0.800% 0.550% 1.350% Discovery 0.800% 0.530% 1.330% Balanced 0.800% 0.530% 1.330% Progressive 0.800% 0.510% 1.310% Dynamic 0.800% 0.510% 1.310% Adventurous 0.800% 0.500% 1.300% Higher Yield Balanced 0.800% 0.530% 1.330% Liquidity 0.800% 0.000% 0.800% Charges correct as at April Charges, limits and terms may change in the future. Please see the What are the charges? section of your personalised illustration(s) for further details. The above charges apply for customers investing in a new Investment Portfolio Bond on and after the 12th November For customers who invested in an Investment Portfolio Bond before the 12th November 2012, your Yearly Management Charge is 1.2% of the fund value, this is made up of an Annual Management Charge of 0.7% and a regular charge of 0.5%. The Yearly Management Charge (1.2%), plus the Other Expenses listed above, make up the Total Yearly Charge for the fund invested in. 8

11 SW s PENSION FUNDS These funds are available through the Retirement Account. There is an Annual Management Charge (AMC) of 0.200% of the fund value which is deducted daily from the fund price. This covers fund management, administration and marketing. The Total Annual Charge of a fund is the sum of the AMC and Other Expenses. Other Expenses include, for example, trustee s fees, auditor s fees and regulator s fees. The allowance for Other Expenses can change on a regular basis. Name AMC Other Expenses Total Annual Charge Defensive 0.200% 0.560% 0.760% Cautious 0.200% 0.547% 0.747% Discovery 0.200% 0.532% 0.732% Higher Yield Discovery 0.200% 0.532% 0.732% Balanced 0.200% 0.525% 0.725% Higher Yield Balanced 0.200% 0.532% 0.732% Progressive 0.200% 0.512% 0.712% Dynamic 0.200% 0.506% 0.706% Adventurous 0.200% 0.504% 0.704% Charges correct as at April Charges, limits and terms may change in the future. Other product charges in addition to the Total Annual Charge will apply. Please see the Retirement Account Key Features and your personalised illustration(s) for details. The Total Annual Charge is shown in the What are the charges? section of the illustration as Investment Management Charge each year. 9

12 SW s OUR INVESTMENT APPROACHES Please note that these investment approach definitions and ratings are regularly reviewed and may change. You can find information on current investment approaches and notifications of any changes at SECURE These investments provide safety to the amount invested and can be expected to offer relatively low growth over the medium to long-term. They cannot fall in actual value but can fall in real value due to the effects of inflation. Secure investments can be characterised by some or all of the following: Investments are generally cash based A return, normally in the form of interest, which may be modest The future real value or purchasing power of the money could be greatly affected by inflation Assets which the investor could easily withdraw, but early withdrawal or cashing in may result in a penalty (normally loss of interest). Examples Instant Access/Notice Accounts Bank/Building Society Term Accounts Fixed Term Deposit National Savings Accounts & Certificates CAUTIOUS 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 long-term, relatively modest capital growth. The capital value may fluctuate, although some products may offer an element of capital protection. Cautious investments can be characterised by one or both of the following: Investments are typically in Corporate & Government Bonds (Gilts) but may have some small equity exposure Some investments may offer an element of capital protection. Examples Corporate Bonds and Gilt funds Guaranteed Investment Bonds Mixed asset funds weighted towards bonds BALANCED 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. Balanced investments can be characterised by one or both of the following: Investments are typically split between equity related investments (mostly UK, with some overseas) balanced with other investments such as Corporate Bonds & Government Bonds Some mitigation against the effect of fluctuations in returns is achieved by spreading the investment across different asset types. Examples Distribution Bonds Mixed asset funds with a balance between equities and lower risk assets 10

13 SW s PROGRESSIVE 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. Progressive investments can be characterised by one or both of the following: Contains a significant proportion of UK and overseas equity or equity related investment The fixed interest securities portion of an investment is used to provide portfolio diversification. Examples Mixed asset funds weighted towards equities Diversified property funds ADVENTUROUS 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. Adventurous investments can be characterised by one or both of the following: A greater potential to be affected by other risks not directly related to the investment (e.g. currency fluctuations in overseas markets) All or most funds will be in equity or equity related investments. Examples UK Equity funds UK All Share Tracker funds General North American funds SPECIALIST These investments carry a very high risk of capital loss, but with the potential for a higher return over the longterm. They are very volatile and are only suitable for investors who can afford to, and are prepared to, risk the entire capital value. They do not offer any guarantees. Specialist investments can be characterised by some or all of the following: Exposure to very high risk investments High volatility that risks the entire capital value In the case of certain options and derivative investments, there is the potential to lose significantly more than the original capital invested Some investments in this category may require a longer term investment outlook before any benefit may be expected. Examples Options/Derivatives Enterprise Investment Schemes Geographic specialist funds Venture Capital Trusts High volatility fund of hedge funds 11

14 SW s SPECIFIC RISK FACTORS YOU NEED TO KNOW ABOUT THE SW WEALTH FUNDS SPECIFIC RISKS FOR THE WEALTH GROWTH AND HIGHER YIELD FUNDS These s will provide exposure to a wide range of asset classes, including investment through collective investment schemes which may themselves invest in a range of other assets. The assets within the s are likely to vary from time to time and each category of assets has individual risks associated with it. The value of each will depend on the combined performance of all the assets held by it. A rise in the value of one asset class may not result in an increase in the s value. Similarly, a fall in the value of one asset class may not result in a fall in the value of the if others have risen by more. The s invest 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. Some of the fixed interest securities in which the s 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 fixed interest securities held by the s. If long-term interest rates rise, the value of the units is likely to fall and vice versa. The s invest in high yielding fixed interest securities, which carry an increased risk of default and, for which, there is a higher risk that the issuer s credit rating may fall. The value of these investments will usually fall should an issuer default or receive a reduced credit rating, or should the likelihood of these events increase. Exchange rate changes might cause the value of any overseas investment to go up or down. Property is a less liquid asset than other assets such as fixed interest securities or equities and values could be affected if properties need to be sold in a short timescale. Property valuation is generally a matter of judgement by an independent valuer rather than fact and values can go up or down. 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. We reserve the right to 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 directly or indirectly assets 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. 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 value of your investment and any income from it is not guaranteed and can go down as well as up. You may not get back the original amount you invested. SPECIFIC RISKS FOR THE WEALTH LIQUIDITY FUND The invests in a diversified portfolio of high quality sterling denominated 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. Although it is intended to maintain preservation of capital there can be no assurance that this will be maintained. The value of the may be affected by the creditworthiness of the issuers of the investments and although the policy of the is to invest in short term instruments, it may also be affected by substantial adverse movements in interest rates. Exchange rate changes might cause the value of any overseas investment to go up or down. The value of your investment and any income from it is not guaranteed and can go down as well as up. You may not get back the original amount you invested. 12

15 SW s THE SW WEALTH FUNDS WEALTH DEFENSIVE LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to fixed interest securities (including mainly UK corporate and government bonds, also overseas corporate bonds, plus high yield bonds). The will also provide some exposure to equities (mainly UK, but it can also include overseas and emerging markets) and property (both UK and overseas) with limited exposure to cash, commodities and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Defensive Life using the Investment Portfolio Bond and/or in the Defensive Pension using the Retirement Account. You should consider these if you: are prepared to take a Cautious approach to your investments are seeking the potential for medium to long term capital growth are happy to invest mainly in fixed interest securities with some exposure to equities and property and limited exposure to cash, commodities and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Defensive Life only restrictions apply when investing in the Defensive Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 13

16 SW s WEALTH CAUTIOUS LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to fixed interest securities (including mainly UK corporate and government bonds, also overseas corporate bonds, plus high yield bonds). In addition the will provide exposure to equities (mainly UK, but also overseas and emerging markets), some exposure to property (both UK and overseas) and limited exposure to cash, commodities and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Cautious Life using the Investment Portfolio Bond and/or in the Cautious Pension using the Retirement Account. You should consider these if you: are prepared to take a Cautious approach to your investments are seeking the potential for medium to long term capital growth are happy to invest mainly in fixed interest securities with exposure to equities, some exposure to property and limited exposure to cash, commodities and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Cautious Life only restrictions apply when investing in the Cautious Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 14

17 SW s WEALTH DISCOVERY LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to fixed interest securities and equities. The fixed interest exposure includes mainly UK corporate and government bonds, also overseas corporate bonds, plus high yield bonds. The equity exposure is mainly to the UK, but also overseas and emerging markets. In addition the will also provide some exposure to property (both UK and overseas) and limited exposure to cash, commodities and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Discovery Life using the Investment Portfolio Bond and/or in the Discovery Pension using the Retirement Account. You should consider these if you: are prepared to take a Balanced approach to your investments are seeking the potential for medium to long term capital growth are happy to invest mainly in fixed interest securities and equities are happy to have some exposure to property and limited exposure to commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Discovery Life only restrictions apply when investing in the Discovery Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 15

18 SW s WEALTH BALANCED LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure to equities balanced mainly with fixed interest securities. The equity exposure is mainly to the UK, but also overseas and emerging markets. The fixed interest exposure includes mainly UK corporate and government bonds, also overseas corporate bonds plus high yield bonds. The will also provide some exposure to property (both UK and overseas) and limited exposure to commodities, cash, and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Balanced Life using the Investment Portfolio Bond and/or in the Balanced Pension using the Retirement Account. You should consider these if you: are prepared to take a Balanced approach to your investments are seeking the potential for medium to long term capital growth are happy to invest in equities balanced mainly with fixed interest securities are happy to have some exposure to property and limited exposure to commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Balanced Life only restrictions apply when investing in the Balanced Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 16

19 SW s WEALTH PROGRESSIVE LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to equities (mainly UK, but also overseas and emerging markets). The will also provide exposure to fixed interest securities (including mainly UK corporate and government bonds, also overseas corporate bonds, plus high yield bonds), some exposure to property (both UK and overseas) and limited exposure to commodities, cash, and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Progressive Life using the Investment Portfolio Bond and/or in the Progressive Pension using the Retirement Account. You should consider these if you: are prepared to take a Progressive approach to your investments are seeking the potential for medium to long term capital growth are happy to invest mainly in equities, both in the UK and overseas, with exposure to fixed interest securities, some exposure to property and limited exposure to commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Progressive Life only restrictions apply when investing in the Progressive Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate, possibly significantly and you might not get back the full amount you invested. 17

20 SW s WEALTH DYNAMIC LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to equities (mainly UK, but also overseas and emerging markets). The will also provide some exposure to fixed interest securities (including mainly UK corporate bonds, but can also include UK government bonds, also overseas corporate bonds, plus high yield bonds) and property (both UK and overseas) with limited exposure to commodities, cash, and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Dynamic Life using the Investment Portfolio Bond and/or in the Dynamic Pension using the Retirement Account. You should consider these if you: are prepared to take a Progressive approach to your investments are seeking the potential for medium to long term capital growth are happy to invest mainly in equities, both in the UK and overseas, with some exposure to fixed interest securities and property and limited exposure to commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Dynamic Life only restrictions apply when investing in the Dynamic Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate, possibly significantly and you might not get back the full amount you invested. 18

21 SW s WEALTH ADVENTUROUS LIFE/PENSION FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? The aims to achieve long-term growth by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure primarily to equities (mainly UK, but also overseas and emerging markets). The will also provide exposure to fixed interest securities (mainly UK corporate bonds but can also include government bonds, UK and overseas corporate bonds, plus high yield bonds), property (both UK and overseas), commodities, cash, and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Adventurous Life using the Investment Portfolio Bond and/or in the Adventurous Pension using the Retirement Account. You should consider these if you: are prepared to take an Adventurous approach to your investments are seeking the potential for medium to long term capital growth are happy to invest primarily in equities, both in the UK and overseas, with exposure to fixed interest securities, property, commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different types of equities and other investments in a single portfolio want to invest a lump sum and/or regular monthly amounts want your investment to be accessible ( Adventurous Life only restrictions apply when investing in the Adventurous Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate significantly and you might not get back the full amount you invested. 19

22 SW s WEALTH HIGHER YIELD DISCOVERY PENSION FUND CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Higher Higher Yield Discovery Yield Balanced WHAT IS THIS FUND AIMING TO DO? The aims to achieve an income based return by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure mainly to fixed interest securities and also equities. The fixed interest exposure includes mainly UK corporate bonds and high yield bonds, but also UK government bonds and overseas corporate bonds. The equity exposure is mainly to the UK, but also overseas and emerging markets. In addition the will also provide some exposure to property (both UK and overseas) and limited exposure to cash, commodities and other asset classes. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. Please note: The fund aims to provide long term growth in the price of units. Any income generated will not be distributed, but added to the fund value. The Higher Yield Discovery is available as a pension fund only. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Higher Yield Discovery using the Retirement Account. You should consider this if you: are prepared to take a Balanced approach to your investments are seeking the potential for medium to long term capital growth by adding any income generated to the fund value are happy to invest mainly in fixed interest securities and equities with some exposure to property and limited exposure to cash, commodities and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest in a lump sum and/or regular monthly amounts understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 20

23 SW s WEALTH HIGHER YIELD BALANCED LIFE/PENSION FUND CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Higher Higher Yield Discovery Yield Balanced WHAT IS THIS FUND AIMING TO DO? The aims to achieve an income based return by investing in a diversified portfolio of investments, mainly through other funds such as collective investment schemes. The will provide exposure to equities balanced with fixed interest securities. The equity exposure is mainly to the UK, but also overseas and emerging markets. The fixed interest exposure includes mainly UK corporate and government bonds, also overseas corporate bonds, plus high yield bonds. The will also provide some exposure to property (both UK and overseas) and limited exposure to commodities, cash, and other asset classes. Please note: Pension The fund aims to provide long term growth in the price of units. Any income generated will not be distributed, but added to the fund value. Life Any income generated during the first 12 months after each investment will be reinvested into the fund. Thereafter, income payments will commence from the earlier of the following 18th February or 18th August. In practice this means that it may be up to 18 months from the date of an investment before income from that investment is paid. You can request to have these income payments paid monthly rather than biannually if you wish. Exposure to fixed interest securities and equities will include investment in Absolute Return funds. 21

24 SW s WEALTH HIGHER YIELD BALANCED LIFE/PENSION FUND (CONTINUED) CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Higher Higher Yield Discovery Yield Balanced WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Higher Yield Balanced Life using the Investment Portfolio Bond and/or in the Higher Yield Balanced Pension using the Retirement Account. You should consider these if you: are prepared to take a Balanced approach to your investments are seeking to obtain an income (Life only) or the potential for medium to long term capital growth. Please note that any income generated by the Pension will not be distributed but will be added to the fund value are happy to invest in equities balanced with fixed interest securities are happy to have some exposure to property and limited exposure to commodities, cash and other asset classes want experts to manage your investment want to achieve diversification across different asset classes in a single portfolio want to invest a lump sum ( Higher Yield Balanced Life or Pension ) and/or regular monthly amounts ( Higher Yield Balanced Pension only) want your investment to be accessible ( Higher Yield Balanced Life only restrictions apply when investing in the Higher Yield Balanced Pension using a pension) understand that the investment is designed for the medium to long term (at least five to ten years); and accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 22

25 SW s WEALTH LIQUIDITY LIFE FUND SECURE CAUTIOUS BALANCED PROGRESSIVE ADVENTUROUS SPECIALIST Liquidity Defensive Cautious Discovery Balanced Progressive Dynamic Adventurous WHAT IS THIS FUND AIMING TO DO? This fund invests in the Global Liquidity, which is managed by a subsidiary of Aberdeen Standard Investments. ASI describe the aim of its fund as follows: to maximise current income consistent with the preservation of principal and liquidity. Please note: The fund aims to provide long-term growth in the price of units. Any income generated will not be distributed, but added to the fund value. The Liquidity is available as a life fund only. WHY MIGHT THIS FUND BE RIGHT FOR YOU? Following an assessment of your financial needs your financial adviser may recommend that you invest in the Liquidity Life using the Investment Portfolio Bond. You should consider this if you: want a short-term option for your investment during uncertain market conditions want a short term option in which to hold or switch funds prior to investment into another SW fund want experts to manage your investment accept that the value of your investment can fluctuate and you might not get back the full amount you invested. 23

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28 Scottish Widows Limited. Registered in England and Wales No Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number /18