SCOTTISH WIDOWS INVESTMENT SOLUTIONS AND CLERICAL MEDICAL LIFE FUNDS INVESTOR S GUIDE

Transcription

1 SCOTTISH WIDOWS INVESTMENT SOLUTIONS AND CLERICAL MEDICAL LIFE FUNDS INVESTOR S GUIDE

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3 PAGE 2 INTRODUCTION PAGE 3 SCOTTISH WIDOWS INVESTMENT SOLUTIONS (SWIS) LIFE FUNDS MANAGED BY ABERDEEN ASSET MANAGEMENT PAGE 5 SWIS LIFE FUNDS MANAGED BY OTHER FUND MANAGERS, AND CLERICAL MEDICAL CM LIFE FUNDS PAGE 11 LIFE FUNDS INFORMATION 1

4 INTRODUCTION SCOTTISH WIDOWS OFFERS A RANGE OF LIFE FUNDS FROM READY-MADE INVESTMENT PORTFOLIOS TO SPECIALIST FUNDS TO MATCH DIFFERENT INVESTMENT NEEDS. TO MAKE IT EASIER TO FIND THE RIGHT FUND FOR YOU, OUR RANGE IS GROUPED INTO THE FOLLOWING CATEGORIES: 1. SCOTTISH WIDOWS INVESTMENT SOLUTIONS (SWIS) LIFE FUNDS SWIS life funds offer a variety of investment styles and asset classes to choose from. These funds are run by managers who are well-established in their fields. The SWIS s are provided by Scottish Widows Limited. Prior to December 2010 the SWIS funds were known as the Clerical Medical Investment Solutions (CMIS) funds. 2. CLERICAL MEDICAL CM LIFE FUNDS Covering a wide range of asset classes, geographical locations, sectors and management styles, these funds provide building blocks to help you create bespoke investment portfolios. AVAILABILITY All of these funds are available through the Investment Bond. 2

5 SCOTTISH WIDOWS INVESTMENT SOLUTIONS (SWIS) LIFE FUNDS MANAGED BY ABERDEEN ASSET MANAGEMENT These SWIS life funds are all managed by a subsidiary of Aberdeen Asset Management plc ( Aberdeen ). Please note: the SWIS s are provided by Scottish Widows Limited. Prior to December 2010 the SWIS funds were known as the Clerical Medical Investment Solutions (CMIS) funds. THE MANAGER Aberdeen is one of the world s largest independent asset managers by assets under management. Based in 26 countries, Aberdeen manages assets for both institutional and retail clients with 39 offices around the world. As at 31st December 2016, Aberdeen managed assets of over billion. For the majority of funds, Scottish Widows is responsible for defining the fund objectives and determining how the funds should be run. In some cases, Aberdeen defines the fund objectives and determines how the funds should be run. Source: Aberdeen, April

6 s available SWIS Adventurous SWIS Balanced SWIS Balanced of s SWIS Cash SWIS Cautious SWIS Corporate Bond SWIS Distribution SWIS Ethical SWIS European SWIS Far Eastern SWIS Gilt & Fixed Interest SWIS International Fixed Income SWIS International Growth SWIS Japanese SWIS Managed Income SWIS Non-Equity SWIS North American SWIS Smaller Companies SWIS Special Situations SWIS UK Equity of s SWIS UK Equity Income SWIS UK Gilt SWIS UK Growth SWIS UK Index-Linked Gilt SWIS UK Property CM UK Smaller Companies * ABI classification sector Flexible Investment Mixed Investment 40% 85% Shares Mixed Investment 40% 85% Shares Money Market Mixed Investment 20% 60% Shares Sterling Corporate Bond Distribution s Global Equities Europe excluding UK Equities Asia Pacific excluding Japan Equities Sterling Fixed Interest Global Fixed Interest Global Equities Japan Equities Mixed Investment 0% 35% Shares Mixed Investment 0% 35% Shares North America Equities UK Smaller Companies UK All Companies UK All Companies UK Equity Income UK Gilts UK All Companies UK Index-Linked Gilts UK Direct Property UK Smaller Companies *formerly known as the CM UBS UK Smaller Companies 4

7 SWIS LIFE FUNDS MANAGED BY OTHER FUND MANAGERS, AND CLERICAL MEDICAL CM LIFE FUNDS Please note: the SWIS s are provided by Scottish Widows Limited. Prior to December 2010 the SWIS funds were known as the Clerical Medical Investment Solutions (CMIS) funds. THE MANAGER Fidelity International was founded in Since then, it has remained true to one simple goal: to achieve outstanding investment returns for its clients. This is recognised by numerous awards which reflect the performance of its funds, the quality of its research, its customer service and its technical innovation. Building out from its first offices in Tokyo and London, it now serves individuals, institutions and multinational corporations and their advisers in all major financial centres across Asia Pacific, Europe and the Middle East. It is one of the largest fund management groups in the UK. Assets totalling over 226 billion (as at 31st December 2016) are managed from worldwide locations including London, Bermuda, Milan, Paris, Tokyo, Mumbai, Seoul, Singapore, Melbourne, Sydney, Shanghai, Taipei and Dubai. Source: Fidelity International, April s available CM Fidelity American CM Fidelity Defensive Managed CM Fidelity European CM Fidelity Extra Income CM Fidelity MoneyBuilder Growth * CM Fidelity MoneyBuilder Income CM Fidelity South East Asia CM Fidelity WealthBuilder CM Fidelity Worldwide Special Situations ABI classification sector North America Equities Mixed Investment 0% 35% Shares Europe excluding UK Equities Sterling Strategic Bond UK All Companies Sterling Corporate Bond Asia Pacific excluding Japan Equities Global Equities Global Equities *formerly known as CM Fidelity Growth and Income 5

8 THE MANAGER Insight Investment Management (Global) Limited ( Insight ) is one of the UK s largest active managers responsible for 523 billion* in assets under management across fixed income, risk management strategies including liability-driven investment and currency risk management, absolute return and multi-asset capabilities. Based in London, Insight is a specialist asset manager with a global network of operations in the UK, US, Japan and Australia. Its clients include pension funds, corporates, local authorities, insurers, sovereign wealth funds, wealth managers, financial institutions and supra-nationals. At the heart of its investment philosophy is a desire to offer clients innovative yet practical solutions. To achieve this, it combines expertise, strength and depth of knowledge with innovation across a broad range of asset classes and the risk/return spectrum to offer its clients complete flexibility; an essential tool in delivering tailored client solutions. A team-oriented approach is the lynchpin of its business and means that it can draw on the in-house expertise of high calibre professionals at any time. Their investment professionals are specialists in their field meaning they have the right people doing the right jobs for their clients. By working in partnership with clients and their advisers they develop and evolve effective solutions that meet their changing needs. Following this approach, Insight has grown into a leading force in investment management; its business is strong and growing, generating year-on-year growth in assets under management since launch in *As at 31st December Assets under management are represented by the value of cash securities and other economic exposure managed for clients. Source: Insight, 31st December s available SWIS Absolute Return SWIS Dynamic Return SWIS Target Return ABI classification sector Specialist Flexible Investment Specialist 6

9 THE MANAGER Invesco Perpetual is one of the largest independent investment managers in the UK, managing billion in assets 1 on behalf of consumers and professional investors. Invesco Perpetual s highly-regarded investment management team is focused on finding attractive investment opportunities in all market conditions. Central to their approach is a belief in active fund management; building portfolios based on thorough research and analysis to identify the investment opportunities they consider most likely to provide strong long-term returns. Invesco Perpetual forms part of Invesco Ltd, one of the world s leading independent investment management organisations dedicated to helping investors worldwide achieve their financial ambitions. 1 Total assets managed by Invesco Perpetual s Henley based investment centre as at 31st March Source: Invesco Perpetual, April s available CM Invesco Perpetual Corporate Bond CM Invesco Perpetual Distribution CM Invesco Perpetual Emerging Countries CM Invesco Perpetual Global Bond CM Invesco Perpetual Global Smaller Companies CM Invesco Perpetual High Income CM Invesco Perpetual Hong Kong and China CM Invesco Perpetual Monthly Income Plus CM Invesco Perpetual UK Focus * ABI classification sector Sterling Corporate Bond Mixed Investment 20% 60% Shares Global Emerging Markets Equities Global Fixed Interest Global Equities UK Equity Income Global Emerging Markets Equities Sterling High Yield UK All Companies *formerly known as the CM Invesco Perpetual UK Aggressive 7

10 THE MANAGER Newton Investment Management Limited (Newton) is one of BNY Mellon Investment Management s specialist asset managers. BNY Mellon Investment Management is the global investment management arm of BNY Mellon, one of the world s major financial services groups. BNY Mellon Investment Management s multi-boutique model encompasses the investment skills of a number of world class specialist investment managers in its UK range, including Newton, Standish, The Boston Company, Walter Scott and Insight Investment. With over US$1.6 trillion in assets under management (as at 31st December 2016), BNY Mellon Investment Management holds a number of market leading positions globally. Newton is one of the pioneers of global thematic investing and this philosophy has been fundamental in the delivery of compelling performance in rising and falling markets. The firm terms its investment approach as active stock and bond selection within a global framework. This approach involves the skills of active fund management on a daily basis and recognises that no one market in the world operates independently from activities and developments in others around the world. Source: The Bank of New York Mellon Corporation, April s available CM Boston Company US Opportunities * CM Newton Multi-Asset Balanced CM Newton Continental European CM Newton Global Equity ** CM Newton Global Higher Income CM Newton Higher Income CM Newton International Bond CM Newton Multi-Asset Growth CM Newton Multi-Asset Diversified Return CM Newton UK Equity *** ABI classification sector North America Equities Mixed Investment 40% 85% Shares Europe excluding UK Equities Global Equities Global Equities UK Equity Income Global Fixed Interest Flexible Investment Mixed Investment 20% 60% Shares UK All Companies *formerly known as the CM BNY Mellon American **formerly known as CM Newton International Growth ***formerly known as CM Newton Income formerly known as the CM Newton Balanced formerly known as the CM Newton Managed formerly known as the CM Newton Phoenix 8

11 THE MANAGER At Schroders, asset management is their business and their goals are completely aligned with those of their clients the creation of long-term value. They manage billion ( billion/us$490.7 billion) on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, invested in a broad range of asset classes across equities, fixed income, multi-asset and alternatives. They employ over 4,100 talented people worldwide operating from 41 offices in 27 different countries across Europe, the Americas, Asia and the Middle East, close to the markets in which they invest and close to their clients. Schroders has developed under stable ownership for over 200 years and long-term thinking governs their approach to investing, building client relationships and growing their business. Source: Schroders, all data as at 31st December s available CM Schroder Corporate Bond CM Schroder European Alpha CM Schroder Gilt & Fixed Interest CM Schroder QEP Global Core ** CM Schroder Global Equity CM Schroder Global Cities Real Estate *** CM Schroder Income CM Schroder Managed Balanced CM Schroder Monthly High Income CM Schroder Tokyo CM Schroder UK Mid 250 CM Schroder UK Smaller Companies CM Schroder US Mid Cap * ABI classification sector Sterling Corporate Bond Europe excluding UK Equities UK Gilts Global Equities Global Equities Global Property UK Equity Income Mixed Investment 40% 85% Shares Sterling High Yield Japan Equities UK All Companies UK Smaller Companies North America Equities *formerly known as the CM Schroder US Small & Mid Cap **formerly known as the CM Schroder Global Climate Change ***formerly known as the CM Schroder Global Real Estate Securities 9

12 THE MANAGER UBS Asset Management is a large-scale asset manager with a presence in 22 countries. It offers investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients. Their global capabilities include equity, fixed income, currency, hedge funds, real estate, infrastructure and private equity investment capabilities that can also be combined into customised solutions and multi asset strategies. UBS is a leading fund house in Europe, the third-largest international asset manager in Asia, the largest mutual fund manager in Switzerland and one of the largest fund of hedge funds and real estate investment managers in the world. Source: UBS Asset Management, April s available CM UBS Global Allocation CM UBS Global Growth CM UBS UK Opportunities * CM UBS US Equity ABI classification sector Mixed Investment 40% 85% Shares Global Equities UK All Companies North America Equities *formerly known as CM UBS UK Growth THE MANAGER Veritas is a UK based boutique manager of Asian and Global Equity funds. Veritas opened for business in 2003 remaining an independent owner managed partnership ever since. Their focus is on protecting and growing the real value of clients capital. The partnership now manages 15bn (as at 31st March 2017) across their pooled funds and segregated institutional accounts. They believe their partnership ownership structure coupled with partners investing their own capital in Veritas own funds alongside those of their clients, on the same commercial terms, allow members of the partnership to align interests directly with those of their clients. Source: Veritas, April s available CM Veritas Asian * ABI classification sector Asia Pacific excluding Japan Equities *formerly the CM Newton Oriental 10

13 LIFE FUNDS INFORMATION The SWIS and Clerical Medical 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 (although investors in the SWIS Distribution, SWIS UK Equity Income and SWIS Managed Income can choose to receive income as a direct payment instead). A proportion of each unit-linked fund may be held in cash to provide liquidity or while awaiting suitable investments. The SWIS and Clerical Medical 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 value 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 SWIS and Clerical Medical life funds currently available are shown on pages There are charges associated with investing in the funds. The charges can be different for different funds and can change. For details of the charges, please contact your financial adviser or Scottish Widows. 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 you may get back less than you 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 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. 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. 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. s 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 overlap. 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. 11

14 Where any of the following general risks apply to a fund, they will be indicated beside the aims of the fund shown in the next section. Any specific risks associated with a fund will also be shown here. DV This fund uses derivatives and forward transactions for specific investment purposes, as well as for hedging and other efficient portfolio management purposes. Their use may lead to higher volatility. DVL This fund uses derivatives and forward transactions for specific investment purposes, as well as for hedging and other efficient portfolio management purposes. It s not intended that the use of derivatives in this way will cause the fund to have high volatility or otherwise cause its existing risk profile to change. EM This fund invests in emerging markets so might invest in stockmarkets which are generally less well regulated than those in the UK. This may result in a greater risk that the value of the units might go down. The investments in these markets might also be bought and sold infrequently therefore resulting in large changes in their prices. EQ 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. HY This fund invests 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. OS PR Exchange rate changes might cause the value of any overseas investment to go up or down. Your investment in this fund is at risk. There is no guarantee that the fund will deliver positive returns over the specific, or any, time period. 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 or 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. PYS 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. SC 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. SP This fund has a select portfolio, which has a limited number of stocks. By investing in a select portfolio there might be greater fluctuations in the value of the units than with a wider portfolio. 12

15 ASIA PACIFIC EXCLUDING JAPAN EQUITIES SECTOR SWIS Far Eastern CM Fidelity South East Asia CM Veritas Asian * 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. The aims to provide long-term capital growth from a portfolio primarily comprised of equities listed on the stock exchanges throughout the Asian region, excluding Japan. Investment will be primarily in directly held transferable securities. To achieve capital growth by investing in the Asian and Pacific markets, excluding Japan. DVL EM EQ OS EM EQ OS EM EQ OS *formerly the CM Newton Oriental DISTRIBUTION FUNDS SECTOR SWIS Distribution The fund aims to achieve long-term capital growth by gaining exposure predominately to UK equities, fixed interest, index-linked stocks and cash. The income version of the fund distributes all the income generated within the fund, while the capital is untouched. EQ FI OS PY EUROPE EXCLUDING UK EQUITIES SECTOR SWIS European 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). EQ OS A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. 13

16 EUROPE EXCLUDING UK EQUITIES SECTOR (CONTINUED) CM Fidelity European CM Newton Continental European CM Schroder European Alpha To achieve long-term capital growth from a portfolio primarily made up of the shares of Continental European companies. To achieve capital growth from a carefully selected portfolio of Continental European equities. The fund aims to achieve capital growth through investment in European countries excluding the UK. EQ OS EQ OS SC SP EQ OS SP FLEXIBLE INVESTMENT SECTOR SWIS Adventurous SWIS Dynamic Return CM Newton Multi-Asset Growth * The fund aims to achieve long-term capital growth by gaining exposure almost exclusively to UK and overseas equities, but with some flexibility to gain a minority exposure to commercial property and fixed interest stocks. The fund aims to achieve long-term capital growth through gaining exposure to a diversified range of asset classes. To maximise the total return from income and capital growth from a portfolio of UK, EU and international securities. EQ FI OS PYS DVL EQ FI HY OS PYS EQ FI OS *formerly known as the CM Newton Managed GLOBAL EMERGING MARKETS EQUITIES SECTOR CM Invesco Perpetual Emerging Countries CM Invesco Perpetual Hong Kong and China To achieve capital growth primarily through a portfolio of shares in companies established and/or operating in countries where, in the opinion of the ACD, there is an emerging market. To achieve capital growth through a portfolio of investments with an exposure to the economies of Hong Kong and China. EM EQ OS EM EQ OS 14

17 GLOBAL EQUITIES SECTOR SWIS Ethical SWIS International Growth CM Fidelity WealthBuilder CM Fidelity Worldwide Special Situations CM Invesco Perpetual Global Smaller Companies CM Newton Global Higher Income CM Newton Global Equity * CM QEP Global Core CM Schroder Global Equity CM UBS Global Growth The fund aims to achieve long-term capital growth by investing in companies whose activities are considered ethical, both in terms of their primary activities as well as in the means of achieving them. 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 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 may only take limited positions away from these Indices. This means there are limitations on the extent to which the 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). A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. The fund is managed with the aim of providing long-term capital growth from a portfolio of Fidelity s OEIC sub-funds which are themselves invested across a broad range of world financial markets. The fund is managed with the aim of achieving long-term capital growth by investing in an actively managed portfolio primarily of UK & International equities. The Invesco Perpetual Global Smaller Companies aims to achieve capital growth through a portfolio of investments in international securities. The fund intends to invest mainly in shares of smaller companies, which are quoted on the world s stock markets. The objective of the fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The may also invest in collective investment schemes. EQ OS EM EQ OS EM EQ FI HY OS EM EQ OS SC EM EQ OS SC EM EQ FI OS SC To achieve capital growth from a portfolio of international securities. EM EQ OS Schroder describe their funds aim as follows: The s investment objective is to achieve the optimum overall return of capital and income in sterling terms through flexible global investment management. The will invest internationally in equities quoted on recognised stock exchanges. The may also invest in a wide range of investments including transferable securities, collective investment schemes, warrants and money market instruments. To achieve a high total return by investing principally in equities listed on stock markets around the world. To achieve long-term growth through active management of a diversified portfolio invested in global equities other than UK equities. DV EM EQ OS SC DV EM EQ OS EQ OS SC *formerly known as CM Newton International Growth 15

18 GLOBAL FIXED INTEREST SECTOR SWIS International Fixed Income CM Invesco Perpetual Global Bond CM Newton International Bond The fund aims to maximise total returns by investing in a global portfolio of interest bearing securities. Invesco Perpetual describe their fund s aim as follows: The aims to achieve a combination of income and capital growth over the medium to long term by investing primarily in debt securities and currencies globally. Debt securities include government bonds, as well as securities issued by supranational bodies, local authorities, national public bodies and corporate issuers. The may also invest in high yield, unrated, convertible, sub-investment grade debt securities. Financial derivative instruments can be used for investment purposes and for efficient portfolio management. Please note: The Clerical Medical unit-linked funds aim to provide longterm growth in the price of the units. Any income generated will not be distributed but added to the fund value. The fund aims to maximise the total return from the income and capital growth in the world bond markets through investment predominantly in Government and other public securities. The fund may also invest in deposits, derivative instruments and collective investment schemes. FI FIG HY OS DV EM FI FIG OS DV EM FI FIG OS GLOBAL PROPERTY SECTOR CM Schroder Global Cities Real Estate * The fund s investment objective is to provide a total return primarily through investment in real estate investment trusts, equity and debt securities of other types of property companies worldwide. EQ OS SP *formerly known as the CM Schroder Global Real Estate Securities JAPAN EQUITIES SECTOR SWIS Japanese CM Schroder Tokyo 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. DVL EQ OS To achieve capital growth by investing in Japanese equities. EQ OS 16

19 MIXED INVESTMENT 0% 35% SHARES SECTOR SWIS Managed Income SWIS Non-Equity CM Fidelity Defensive Managed The aims to achieve long-term total return by gaining exposure orientated towards commercial property and fixed interest stocks with flexibility to gain exposure to a minority holding of equity investments. The fund aims to provide a long-term total return by gaining exposure almost exclusively to a range of commercial property, fixed interest and index-linked stocks. To achieve capital growth through investment in a wide range of Fidelity investment funds. Primarily invested in a combination of UK corporate and government bonds and other fixed income and money market securities, preference shares and convertibles. EQ FI OS PY FI OS PYS EQ FI HY OS MIXED INVESTMENT 20% 60% SHARES SECTOR SWIS Cautious CM Invesco Perpetual Distribution CM Newton Multi-Asset Diversified Return * The fund aims to achieve long-term capital growth by gaining exposure to UK equities, commercial property and fixed interest stocks. The will normally operate a broadly equal weighting between the equity and non-equity classes with flexibility to move over and underweight positions in any asset class to meet market circumstances. Invesco Perpetual describe their fund s aim as follows: The fund aims to achieve a combination of income and capital growth over the medium to long term by investing primarily in corporate and government debt securities globally (which may be unrated or sub-investment grade) and equities. Financial derivative instruments can be used for investment purposes and for efficient portfolio management. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To achieve long-term capital growth from a balanced portfolio in a range of international markets. EQ FI OS PYS DV EQ FI HY OS DV EM EQ FI HY OS *formerly known as the CM Newton Phoenix 17

20 MIXED INVESTMENT 40% 85% SHARES SECTOR SWIS Balanced SWIS Balanced of s CM Newton Multi-Asset Balanced * CM Schroder Managed Balanced CM UBS Global Allocation The fund aims to achieve long-term capital growth by gaining exposure predominately to UK and overseas equities, with flexibility to gain a minority exposure to commercial property and fixed interest stocks. The objective of the fund is to achieve capital growth. The policy of the fund is to gain exposure to one or more of the following asset classes: fixed income, cash, near cash and deposits, equities, property, collective investment schemes which have as their objective an absolute or target return, structured products or any other geographic or economic sectors of the world. Exposure to these asset classes will generally be achieved through investment in collective investment schemes, but may be achieved by direct investment, except in the case of property. The fund may also invest in other transferable securities, money market instruments and derivatives. To achieve a balance between capital growth and income from a portfolio of UK and international securities. To achieve capital growth through a balanced exposure to international equities and bonds, by investing primarily in authorised unit trusts managed by Schroders. To achieve long-term capital growth through the active management of a diversified portfolio invested in domestic and international equities, bonds and cash. EQ FI OS PYS DV EQ FI HY OS PYS DV EM EQ FI HY OS SC EQ FI OS DV EM EQ FI FIG HY OS *formerly known as the CM Newton Balanced MONEY MARKET SECTOR SWIS Cash The fund aims to provide long-term growth consistent with high levels of capital security by investing mainly in short-term securities. Specific risks 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. 18

21 NORTH AMERICA EQUITIES SECTOR SWIS North American CM Boston Company US Opportunities * CM Fidelity American CM Schroder US Mid Cap ** CM UBS US Equity 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. To achieve capital growth from a portfolio of US equities. EQ OS SC To achieve long-term capital growth through a portfolio composed primarily of US equities. The s investment objective is to provide capital growth and income primarily through investment in equity securities of mediumsized US companies. Investment will be in directly held transferable securities. The may also invest in collective investment schemes, warrants and money market instruments. To achieve long-term growth through active management of a diversified portfolio primarily invested in US equities. EQ EQ OS OS EQ OS SC EQ OS *formerly known as the CM BNY Mellon American **formerly known as the CM Schroder US Small & Mid Cap SPECIALIST SECTOR SWIS Absolute Return SWIS Target Return The fund aims to deliver attractive, positive returns over rolling 12 month periods in all market conditions. The fund aims to deliver positive returns on an annual basis with the prospect of long-term capital growth commensurate with returns from equities but with a lower volatility. EM EQ FI OS PR Specific risks This fund uses derivatives and forward transactions for specific investment purposes, as well as for hedging and other efficient portfolio management purposes. It s not intended that the use of derivatives will cause the risk profile of the fund to change. DVL EQ FI HY OS PR PYS 19

22 STERLING CORPORATE BOND SECTOR SWIS Corporate Bond CM Fidelity MoneyBuilder Income CM Invesco Perpetual Corporate Bond CM Schroder Corporate Bond The fund aims to provide an above average income from a diversified portfolio of interest bearing securities. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To achieve an attractive level of income from a portfolio primarily invested in GBP-denominated fixed-interest securities. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. Invesco Perpetual describe their fund s aim as follows: The fund aims to achieve a combination of income and capital growth over the medium to long term by investing primarily in investment grade corporate debt securities. The fund may also invest in government, unrated and sub-investment grade debt securities. Financial derivative instruments can be used for investment purposes and for efficient portfolio management. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To achieve an optimum level of interest (or yield) with the lowest possible level of risk by investing in bonds and other fixed interest securities, primarily those issued by UK companies and the British Government. FI HY OS FI FIG HY DV FI FIG HY OS DV FI HY STERLING FIXED INTEREST SECTOR SWIS Gilt & Fixed Interest To provide long-term growth by investing in a range of fixed-interest assets. FI FIG HY OS STERLING HIGH YIELD SECTOR CM Invesco Perpetual Monthly Income Plus CM Schroder Monthly High Income Invesco Perpetual describe their fund s aim as follows: The fund aims to achieve a high level of income together with capital growth over the medium to long term by investing primarily in corporate and government high yielding debt securities globally (which may be unrated or sub-investment grade), and equities. Financial derivative instruments can be used for investment purposes and for efficient portfolio management. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To provide a high level of income, which is distributed monthly by investing in a diverse portfolio of bonds. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. DV EQ FI HY OS FI HY 20

23 STERLING STRATEGIC BOND SECTOR CM Fidelity Extra Income To achieve a relatively high level of income from a portfolio invested in a combination of UK corporate and government bonds and other fixed income and money market securities, preference shares and convertibles. Please note: The Clerical Medical unit-linked funds aim to provide longterm growth in the price of the units. Any income generated will not be distributed but added to the fund value. FI FIG HY UK ALL COMPANIES SECTOR SWIS Special Situations SWIS UK Equity of s SWIS UK Growth CM Fidelity MoneyBuilder Growth * CM Invesco Perpetual UK Focus **** CM Newton UK Equity ** The fund aims to provide capital growth by active investment in UK companies with above average potential for growth. To achieve long-term capital growth by investing predominantly in units of collective investment schemes which invest in any sector of the UK economy. The fund may also invest directly in securities in such sectors. 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. To achieve a combination of income and long-term capital growth from a portfolio primarily made up of shares of UK companies. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To achieve long-term capital growth through a portfolio of primarily UK securities. To achieve capital growth and provide income from a portfolio of predominantly UK equities. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. EQ SC EQ EQ EQ OS EQ SC SP EQ OS SC 21

24 UK ALL COMPANIES SECTOR (CONTINUED) CM Schroder UK Mid 250 To achieve long-term capital growth by investing in the medium-sized companies listed on the FTSE Mid 250 Index. EQ CM UBS UK Opportunities *** To achieve long-term growth through active management of a diversified portfolio invested primarily in UK equities. EQ SC *formerly known as the CM Fidelity Growth and Income **formerly known as the CM Newton Income ***formerly known as the CM UBS UK Growth ****formerly known as the CM Invesco Perpetual UK Aggressive UK DIRECT PROPERTY SECTOR SWIS UK Property The fund aims to achieve long-term capital growth by investing mainly in UK commercial properties. PY UK EQUITY INCOME SECTOR SWIS UK Equity Income CM Invesco Perpetual High Income CM Newton Higher Income CM Schroder Income 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 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 may only take limited positions away from the Index. This means there are limitations on the extent to which the 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). *A sector is a business area, industry or economy which shares the same characteristics. Company shares are typically grouped into different sectors depending on the company s business, for example travel and leisure or telecommunications. To achieve a high level of income, together with capital growth by primarily investing in companies listed in the UK. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To achieve increasing distribution on a calendar year basis with longterm capital growth. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. To provide a growing income by investing primarily in UK equities. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. EQ EQ FI HY EQ SP EQ SP 22

25 UK GILTS SECTOR SWIS UK Gilt CM Schroder Gilt & Fixed Interest The fund aims to maximise total returns by investing primarily in interest bearing securities issued by the UK government with flexibility to gain exposure to a minority holding in other fixed interest stocks. The fund aims to achieve a high level of income with the potential for capital growth, from investment in a diversified portfolio of sterling denominated fixed interest securities. Please note: The Clerical Medical unit-linked funds aim to provide long-term growth in the price of the units. Any income generated will not be distributed but added to the fund value. FI FIG OS FI FIG UK INDEX-LINKED GILTS SECTOR SWIS UK Index- Linked Gilt The fund aims to maximise total returns by investing primarily in index-linked interest bearing securities issued by the UK government with flexibility to gain exposure to a minority holding in other fixed interest stocks. FI FIG UK SMALLER COMPANIES SECTOR SWIS Smaller Companies The fund aims to achieve long-term capital growth through investing mainly in smaller companies, principally in the UK. EQ SC CM Schroder UK Smaller Companies To achieve a long-term capital growth through a portfolio of UK smaller companies. EQ SC CM UK Smaller Companies * To achieve long-term capital growth through the active management of a diversified portfolio invested primarily in the equities of UK smaller companies. EQ SC *This fund was formerly known as the CM UBS UK Smaller Companies. UBS closed their UBS UK Smaller Companies fund on 29th August As a result this CM fund is now invested wholly in an alternative underlying fund, the Scottish Widows UK Smaller Companies. The aims, specific risks and charges of the CM UK Smaller Companies were unaffected by this change. 23

26 IMPORTANT NOTES Scottish Widows Investment Solutions and Clerical Medical funds are not in any way sponsored, endorsed, sold or promoted by FTSE International Limited ( FTSE ) or by the London Stock Exchange Plc (the Exchange ) or by The Financial Times Limited ( FT ) and neither FTSE nor Exchange nor FT makes any warranty or representation whatsoever, expressly or implied, either as to the results to be obtained from the use of the FTSE All Share ( the Index ) and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE. However, neither FTSE nor the Exchange nor FT shall be liable (whether in negligence or otherwise) to any person for any error in the Index and neither FTSE or Exchange or FT shall be under any obligation to advise any person of any error therein. FTSE, FT-SE and Footsie are trade marks of the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International under licence. All-World, All-Share, All-Small and FTSE4Good are trade marks of FTSE International Limited. 24

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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