The Key Features of The Save & Prosper range of unit trusts and OEICs (including investment in The Fleming Asset Management ISA)

Transcription

1 Fleming Fund Marketing The Key Features of The Save & Prosper range of unit trusts and OEICs (including investment in The Fleming Asset Management )

2 Key Features of the Save & Prosper range of unit trusts and OEICs (including investment in The Fleming Asset Management ) Their aims Estimated Income Invest yield a distribution investment monthly Fund of funds Investment objective % p.a. dates Fleming Portfolio Fund Masterfund UK funds Extra Income Fund To provide capital growth over the long term by investing anywhere in the world in any economic sector through regulated collective investment schemes managed or operated by Fleming Group companies. To invest anywhere in the world, in any economic sector, through authorised unit trust schemes and open-ended investment companies operated or managed by Save & Prosper or Flemings. The fund aims to provide capital growth over the long term. To provide a high and stable income, with the prospect of capital and income growth over the long term, by investing in a balanced portfolio of securities. The fund currently invests in a balanced portfolio of blue-chip UK equities, giltedged securities and other UK fixed-interest instruments. To provide long-term capital growth from investment in stocks and shares. The fund currently invests in a portfolio of UK equities. To provide a high income with prospects of capital growth through investment in stocks and shares. The fund currently invests in a portfolio of UK equities and fixed-interest instruments. To provide a portfolio invested in the shares of UK companies, in any economic sector, with the prospect of a rising income over the long term. The fund aims to provide income growth and capital growth over the long term. To provide long-term capital growth through investment in UK smaller companies in any economic sector. 30/4b Nil 31/10 YES NO 31/ /7 YES YES /3 30/6 YES YES 30/9 31/12 Premier Equity Growth Fund /7 YES YES Premier Equity Income Fund 15/ /7 YES YES UK Growth & Income Fund UK Smaller Companies Fund European funds /3 YES YES 15/ /3 YES YES European Growth Fund To provide a portfolio invested in the shares of Continental European companies in any economic sector. The fund aims to provide capital growth over the long term. Nil 31/12 YES YES European Smaller Companies Fund To achieve long-term capital growth through investment in European smaller companies in any economic sector. Nil 15/1 YES YES North American funds American Smaller Companies Fund United States Growth Fund To provide long-term capital growth through investment in American smaller companies in any economic sector. To provide a portfolio invested in the shares of US companies in any economic sector. The fund aims to provide capital growth over the long term. Nil Nil 31/3 15/4 YES YES YES YES Far Eastern funds Japan Growth Fund South East Asia Growth Fund To provide a portfolio invested in the shares of Japanese companies in any economic sector. The fund aims to provide capital growth over the long term. To provide long-term capital growth from investment primarily in the securities of companies quoted or trading in South East Asia. Nil 31/10 YES YES /6 YES YES International equity funds Financial Securities Fund To provide a portfolio invested throughout the world in any financial services sector. The fund aims to provide capital growth over the long term /1 YES YES Growth Fund To provide a portfolio invested throughout the world in any sector. The fund aims to provide capital growth over the long term /2 YES YES Investment Trust Units To invest worldwide in any economic sector through investment trusts. The fund 31/5 aims to provide capital growth over the long term /11 YES YES Emerging Markets funds China Dragon Fund Emerging Markets Fund Korea Fund Latin America Fund To achieve long-term capital growth by investing principally in the shares or stock of companies quoted or operating in China or its adjoining territories, in any economic sector. To achieve long-term capital growth from investment primarily in the securities of companies quoted or trading in countries where there is an emerging market or in closed-ended vehicles which invest primarily in such securities. The fund also may purchase fixed-interest securities. To achieve long-term capital growth by investing principally in the shares of companies quoted or trading in Korea, in any economic sector. To achieve long-term capital growth from investment primarily in the securities of companies quoted or trading in the countries of Latin America, or in closed-ended vehicles which invest primarily in such securities. The fund also may purchase fixedinterest securities /6 YES YES /7 NO YES Nil 15/12 NO NO /8 NO YES 1

3 Their aims Estimated Income Invest yield a distribution investment monthly Natural Resources funds Investment objective % p.a. dates Commodity Share Fund Bonds & Cash funds To provide a portfolio of shares in companies throughout the world engaged in the production and marketing of commodities. The fund aims to provide capital growth over the long term /4 NO YES Cash Fund To achieve a high yield principally through deposits, loans and investments in 31/1 30/4b money market instruments anywhere in the world /7 31/10 NO NO High Income Fund To achieve a high income with capital growth prospects through a managed portfolio invested predominantly in UK corporate bonds and UK Government and other public securities and other fixed-income securities anywhere in the world, as the manager considers appropriate /3 30/6 30/9 31/12 YES YES International Bond Fund To provide the best possible total return through investment anywhere in the world 30/4 in interest-bearing securities in any economic sector /10 NO YES OEIC Funds The following funds form part of the Fleming Investment Company ICVC, an authorised open-ended investment company (OEIC). Estimated Income Invest yield a distribution investment monthly Name of Fund Class of shares Investment objective % p.a. Dates New Europe Fund Save & Prosper New To provide capital growth over the long term. It seeks to do so Europe Shares primarily through a portfolio of companies operating or Nil 31/3 YES YES Income Generator Fund Save & Prosper Income investing in the Central and Eastern European regions. To provide high income primarily through a portfolio of fixedinterest /3 30/6b YES NO Generator Shares securities. 30/9 31/12 a All estimated yields are quoted net, except for Cash Fund, High Income Fund, International Bond Fund and Income Generator Fund, which are gross. b Fleming Portfolio Fund and Cash Fund offer accumulation units only therefore these are deemed income dates for tax purposes. Income Generator Fund offers both income and accumulation share types; if you choose the latter these are deemed income dates for taxation purposes. All other funds offer income units/shares only. All information for each fund is correct as at 1st September Any of these funds may be merged at any time, subject to the prior approval of the unit/shareholders. Individual Savings Accounts (s) You can invest in the majority of these unit trusts and OEIC s inside or outside an Individual Savings Account (). The tables on pages 1 and 2 show which funds are not available for investments. What is an Individual Savings Account ()? An is an account into which you can invest money without having to pay tax on any profits made, or on any income or interest received from your investment. You can hold different types of investment in your. What investments can be held within an? There are three types of investment component which can be held within an : Stocks and Shares Component Cash Component Insurance Component May include investments in unit trusts, open-ended investment companies (OEICs) and investment trusts Usually an interest bearing deposit account Can include certain types of life assurance Providers may offer two different types of ; Maxi s and Mini s. A Maxi must be capable of containing the Stocks and Shares Component, and may also contain cash and/or insurance policies. A Mini is made up of just one component. Providers may also offer a TESSA-only, which can only hold the maturity proceeds from a Tax Exempt Special Savings Account (TESSA). Different providers will offer you a different mix of investments within their. How many s can I have? Each tax year you can put money into one Maxi with a single provider. Alternatively you can put money in up to three Mini s with different providers, one each for stocks and shares, cash and insurance. You cannot put money into both a Maxi and a Mini in the same tax year. You must choose either the Maxi or the Mini option, and you cannot change your mind during the year. You can however choose different options in different tax years if you wish. There are different limits to the amount you can invest in a Maxi or a Mini : How much can I invest? How many s? In 1999/2000 In later years One Maxi Up to 7,000 but no more than 3,000 Up to 5,000 but no more than 1,000, or in cash and 1,000 in life insurance in cash and 1,000 in life insurance up to three Up to: Up to: Mini s 3,000 in a stocks and shares 3,000 in a stocks and shares 3,000 in a cash 1,000 in a cash 1,000 in a life insurance 1,000 in a life insurance and You can also put capital from a maturing TESSA into a cash Mini or the cash component of amaxi or a TESSA only 2

4 What s do Fleming Asset Management offer? Fleming Asset Management offer: a Maxi unit trust which allows you to invest in stocks and shares through the range of Save & Prosper unit trusts and OEICs shown on pages 1 and 2. You can also hold cash in the Fleming Asset Management Maxi, but not insurance policies. a Stocks and Shares Mini unit trust allowing investment in the Save & Prosper range of unit trusts and OEICs only. We do not offer insurance or cash Mini s. If you subscribe to a Fleming Asset Management Maxi you cannot subscribe to any other kind of (other than a TESSA-only ) in the same tax year. If you subscribe to a Fleming Asset Management Stocks and Shares Mini you can subscribe to a Cash Mini and/or an Insurance Mini and/or a TESSA only with other providers in the same tax year. You cannot open a Maxi or another Stocks and Shares Mini in the same tax year. For details about the Stocks and Shares Component through the Fleming Asset Management Maxi or Mini, please refer to the section headed s on page 2. For details about the Cash Component within the Fleming Asset Management, please refer to the section headed Key Features of the Cash Component on page 7. Who can invest in an? You must be a UK resident and ordinarily resident in the UK for tax purposes, and be aged 18 or over in order to invest in an. An may be suitable for any eligible person who can afford to save and wishes to do so in a tax-free environment. You should think carefully about the risks and your personal circumstances and objectives before deciding if an is appropriate for you, or which type would be most suitable. You should read these Key Features, and in particular the section headed Risk factors on page 3, before you decide to invest. What are the CAT standards? The Government has set certain standards to help identify simple s which offer particular terms. This is called the CAT standard, which stands for: Cost Access the charges on the must be reasonable and within specified limits it must be easy to open, close and take withdrawals from the Terms the terms and conditions of the must be straightforward and simple The fact that an meets the CAT standard does not mean that it is automatically an appropriate investment for you, nor does it provide any guarantee of future investment returns. The fact that an does not meet the CAT standard does not mean it is a worse investment than an which does meet the standard. It may offer terms that are significantly better in key respects that may be important to you. The Fleming Asset Management does not meet the CAT standard in respect of either the Stocks and Shares Component or the Cash Component. Your investment Your Investment How much can I invest? You can invest either as a lump sum, or as a regular monthly saving. The tables below show the maximum and minimum amounts you can invest by each method in a Fleming Asset Management Maxi or Mini, or as a direct unit trust/oeic investment. FAM Maxi FAM Mini Unit Trust OEIC FAM Maxi FAM Mini Unit Trust/ OEIC Minimum 1,000 Except: Fleming Portfolio Fund 7,000 New Europe Fund 2,000 Income Generator Fund 3,000 Masterfund 500 1,000 Except: New Europe Fund 2,000 Income Generator Fund 3,000 Masterfund 500 1,000 Except: Fleming Portfolio Fund 10,000 Masterfund 500 New Europe Fund 2,000 Income Generator Fund 3,000 All of the minimum amounts shown are per fund, while the maximum amounts apply to your total investment across all funds. Please note that Fleming Portfolio Fund is not available for investment in a Mini. You can increase your lump sum investment at a later date; the minimum you can add is 250 per fund, with the exception of: Income Generator Fund 1,000 Fleming Portfolio Fund 2,500 Your increases must not exceed the maximum allowance for that tax year. Regular monthly savings will be deducted from your bank account by Direct Debit. The amount will be taken out of your bank account and invested on the 16th of each month or on the next business day. Please note that you cannot invest monthly into Fleming Portfolio Fund, Cash Fund, Korea Fund, or Income Generator Fund. Banks require 10 working days to set up a new direct debit instruction. If you submit an application for a regular savings plan within 10 business days of the 16th of the month, your first payment will not be collected until the 16th of the following month. Risk factors You should remember that: Lump sum Maximum 7,000 in 1999/2000 tax year (less any cash in cash component) 5,000 in each tax year thereafter (less any cash in cash component) 3,000 Regular monthly savings Minimum No limit No limit 50 No limit Maximum 1,166 in 1999/2000 tax year 416 in each tax year thereafter (No monthly investment into the cash component is permitted) 250 The price of units or shares, and any income from them, can go down as well as up. This means you might get back less than you invest. Past performance is not a guide to future returns. Changes in exchange rates may also affect performance. Any tax concessions are not guaranteed, although the government has indicated that s will run for at least 10 years. However, the tax concessions can change at any time and their value will depend on your circumstances. If you invest in one of our emerging markets or Eastern European area funds, the risk to your capital will be greater than for an investment in one of our other funds. If you invest in Investment Trust Units, the shares within the underlying investment trusts can trade at a premium or a discount, and this might affect the performance of the fund. If you invest in Income Generator Fund, you should be aware that this fund invests in corporate bonds. Bonds with lower credit ratings may have a higher risk of defaulting, which may in turn have an adverse effect on your fund. The annual management charge for Extra Income, Premier Equity Income, UK Growth & Income and Income Generator Funds is currently charged to the fund s capital. This allows more income to be distributed, but may accordingly constrain capital growth. What are my cancellation rights? When we receive your investment instructions, we will send you a notice of your right to cancel. This means that you can cancel your instruction at any time during the 14 days after you receive the cancellation notice. You might not get back a full refund if you decide to cancel your instruction to invest and the value of your investment has fallen at the time we receive your completed cancellation notice. If you have not paid in full for your investment, you will remain liable for the full amount of any such loss. If you cancel your investment in the Stocks and Shares Component you will also cancel any investment you made at the same time in the Cash Component of the. Some of your questions answered When and how are the unit trusts valued? We normally value the unit trusts at 12 noon on each working day. This enables us to calculate the unit prices and, in common with most unit trusts, two prices are quoted. These are the prices at which you can buy units from us and sell them back to us they are often referred to as the offer and bid prices. All deals will be done at forward prices, i.e. the prices calculated at the next valuation point. At any given time, the buying/offer price will be higher than the selling/bid price. The difference between these prices is usually known as the spread. As at 1st September 1999 the spread between the offer and bid prices for each of these funds was 6%, with the exceptions of: High Income Fund 0.0% Cash Fund 0.0% Growth Fund 0.5% Masterfund 0.5% Extra Income Fund 3.5% International Bond Fund 5.4% Japan Growth Fund 5.5% United States Growth Fund 5.8% When and how are the OEIC funds valued? We normally value the OEIC funds at 12 noon on each working day to calculate the price of shares. Shares are priced on a Net Asset Value ( NAV ) basis which is derived by using mid-market prices to value the fund s portfolio, and dividing the total by the number of shares in issue at each valuation point. You can purchase shares from us at NAV plus the initial charge: Income Generator Fund 3.0% New Europe Fund 5.5% 3

5 You can sell them back to us at NAV. All deals will be carried out at forward prices, i.e. the prices calculated at the next valuation point. We may charge a dilution levy of up to 2% on all deals above 1,000,000. This levy is to cover the cost of dealing in the underlying assets of the fund and will be paid directly into the fund. How can I keep track of performance? You can check the unit and share prices and monitor your investment in a variety of ways: Unit and share prices and gross distribution yields for interest paying funds and net distribution yields for dividend paying funds are quoted daily in the Financial Times and other national newspapers under Save & Prosper. You can visit our website at Every six months we send you a manager s report which tells you about your fund s investment holdings, strategy and performance. If you buy units or shares through a regular savings plan or an, we will also send you a detailed statements in April and October each year. How do I sell or transfer my investment? You can sell some or all of your units or shares in a fund on any working day between 8.30 am and 5 pm. The minimum value of units or shares you can sell is currently 100. To do this you can either: Ask your financial adviser to act on your behalf. If you prefer, write to us with your instructions. When you sell units or shares, we will send a statement confirming the transaction. We aim to send you the proceeds within five business days of receiving your instructions. If you wish to close your or transfer the money to another provider, simply tell us in writing and we will carry out your instructions. Please note that if you sell 15,000 or more of units in one transaction, you might receive the cancellation price, which can be lower than the bid/selling price. We require five business days to cancel a direct debit instruction. If you stop payments to a regular savings plan within five business days of the 16th of the month, the payment for that month will still be collected from your bank account. We will return the payment to you within three business days of the payment being deducted. Can I make regular withdrawals from the fund? A regular monthly withdrawal facility is available for direct unit trust investments in the Fleming Portfolio Fund only. The amount of the withdrawal must be specified as a cash amount. Your investment must be held for six months before regular monthly withdrawals can commence, although you can sell your units at any time. The withdrawals will be paid for by cancellation of units. The number of units to be cancelled will be calculated using the bid price. However, if the value of the withdrawal is 15,000 or more, the cancellation price may be used. You can increase, decrease or stop regular withdrawals any time by notifying us in writing. We may stop payment of regular withdrawals if the value of your investment in the Fleming Portfolio Fund falls below 10,000. If this happens we reserve the right to buy back the units in your plan at the bid price then applicable. Regular withdrawals cannot be taken from units in Fleming Portfolio Fund held in an. Can I switch to another Save & Prosper fund? You can sell your units or shares and switch the proceeds into any of our other funds. Please note that doing this for investments outside an may trigger a capital gains tax charge. How and when is the income paid? You can build up your investment by reinvesting the income (if any). This means that the income distribution buys additional units or shares in the fund, instead of paying the income to you. Additional units will be bought at the prevailing offer price, while additional shares in OEIC funds will be bought at NAV plus the initial charge. If you invest a lump sum, you can have the income paid to you by direct credit to a bank or building society. If you do not request to have the income paid to you, it will be automatically reinvested. If you choose to have the income paid to you and you have also invested in the Cash Component, interest earned on the Cash Component will also be paid to you. You cannot elect to receive income and reinvest interest, or vice versa. You cannot elect to receive any income arising from a regular savings plan. Any such income will be automatically reinvested. However, if you have elected to receive income from a lump sum investment in the Stocks and Shares Component, or to receive interest from an investment in the Cash Component of the same, then the income from the regular savings plan will also be paid to you. The income payment dates for each of the funds are shown in the tables on pages 1 and 2. You will normally receive the income payment within five working days of these dates. Please note that income payment dates for the Cash Component are 31st March and 30th September each year. The accounting date for each income period is typically two months before each income payment date. If you invest in the fund during this period, you will not be entitled to any income at the next income payment date. If you already hold units or shares at the accounting date and sell them before the next income payment date, you will still receive the income for that period on that income payment date. Please note that those funds whose investment objective is not primarily to provide income, may not pay a distribution. Please note that Fleming Portfolio Fund and Cash Fund only issue accumulation units, and you cannot therefore elect to receive income from these funds. Income Generator Fund issues both income and accumulation share types; if you want to reinvest income you should invest in accumulation shares. All other funds offer income units/shares. If you invest in accumulation units or shares, for tax purposes you will be deemed to receive the accumulated income on the income payment dates shown. On these dates you will be sent a tax voucher showing the amount of income which has accumulated in the last accounting period. Interest is not paid on cash held in the Stocks and Shares Component of a Fleming Asset Management. However, interest will be paid on investments in the Cash Component of the Fleming Asset Management Maxi, details of which can be found on page 7. How much will any advice cost? If you have arranged this investment through an independent financial adviser, he or she may be entitled to receive commission from Save & Prosper. The amount of any commission payable will depend on the size of your investment (and for regular saving, how long you save). Commission will be paid out of the charges. Your adviser will give you details about the precise cost. Commission will not be paid in respect of an investment in Save & Prosper Growth Fund, Save & Prosper High Income Fund and Save & Prosper Masterfund. How will charges and expenses affect my investment? When you buy units or shares there is an initial charge, which is included in the offer/buying price of the units or added to the share price. Please see page 3 for details on how units and shares are valued and priced. There is also an annual management charge. The majority of the unit trusts and OEICs currently have an initial charge of 5.5% and an annual management charge of 1.5%. The exceptions are shown in the table below. Initial Annual Fund charge charge Cash Fund Nil 0.5% Extra Income Fund 3.0% 1.5% Growth Fund Nil 1.5% High Income Fund Nil 1.0% International Bond Fund 5.5% 0.75% Investment Trust Units 5.5% 1.25% Masterfund Nil Nil* Income Generator Fund 3.0% 1.25% *Masterfund purchases units in other Save & Prosper unit trusts which carry their own annual management charges. You should note that for funds with no initial charge there may still be a bid/offer spread to cover dealing charges and the cost of stamp duty. The annual management charges are deducted from the funds income with the exception of Extra Income, Premier Equity Income, UK Growth & Income and Income Generator funds, which currently take the charge from the capital of the fund. The management charge for High Income Fund may be deducted from the capital, but is currently taken from the fund s income. In addition to the annual management charge, there are also expenses to cover trustee/depositary fees and items such as fees for registration, custody, regulation and audit; the amount of these expenses ranges from 0.11% to 0.77% depending on the fund. The effect of charges on an investment is shown in the tables on pages 5 and 6. The figures assume growth of 6% a year for investments outside an and 7% a year for investments. These example growth rates are standard figures determined by our regulators; they are not guaranteed and only demonstrate the effect of charges and expenses on an example investment. The tax relief available to unit trust and OEIC investments has been taken into account when calculating these figures. Charges can be varied within limits laid down by regulations made under the Financial Services Act If there are special terms offered at the time you invest this might lower the charges and result in different figures to those shown. Further details you should know Who is the registered owner of my investment? Units or shares held in an are registered in the name of Fleming Nominees Limited, an associate of the manager. Units or shares held outside an will be registered in your own name. The registers are the sole evidence of title to units and shares. Certificates are not issued to unit or shareholders. What is the tax position? Any capital gains or income from investments in an are free of UK income tax and capital gains tax (CGT). The minimum and maximum investment allowances are shown in How much can I invest? on page 3. Cash Fund, High Income Fund, International Bond Fund and Income Generator Fund pay income in the form of interest distributions. The other funds pay income in the form of dividend distributions. Although there is no income tax liability on interest or dividend distributions within an, the distributions are subject to tax before they are credited to the account. Interest distributions are paid with a 20% tax credit. This means that tax of 20% has been accounted for to the Inland Revenue. Dividend distributions are paid with a similar tax credit of 10%. These tax credits are 4

6 automatically reclaimed within the. However, the 10% tax credit for dividend distributions can only be reclaimed within the until 5th April If you invest in the funds outside an, your returns will be subject to UK income tax and CGT, if you are liable to those taxes. Please note that the 10% tax credit for dividend distributions cannot be reclaimed on investments outside an, even if you are a non-taxpayer. If you are liable to income tax at the basic rate or lower rate, you will have no further income tax liability on distributions from investments outside an. If, however, you are liable to income tax at the higher rate, you will have an additional liability of 25% of the net distribution. Are the funds authorised? The unit trusts are authorised unit trust schemes within the meaning of the Financial Services Act With the exception of Masterfund, Fleming Portfolio Fund and Cash Fund, they are securities funds as defined in the Financial Services (Regulated Schemes) Regulations 1991 and are wider range investments under the Trustee Investment Act Masterfund and Fleming Portfolio Fund are funds of funds and Cash Fund is a money market fund as defined in the Financial Services (Regulated Schemes) Regulations The Fleming Investment Company ICVC is an openended investment company with variable capital, incorporated in England and Wales under the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 ( the ECA Regulations ). It is an umbrella company as defined in these regulations. It is authorised by the Financial Services Authority and is a collective investment scheme as defined in the Financial Services Act It is governed by the ECA Regulations, the Financial Services (Open-Ended Investment Companies) Regulations 1997 and its Instrument of Incorporation. The registered number of the company is IC Are the funds safeguarded by independent trustees? The independent trustee of the unit trusts and the independent depositary for the OEIC is: The Royal Bank of Scotland plc Drummond House, PO Box Redheughs Avenue Edinburgh EH12 9JN The Royal Bank of Scotland plc is regulated by the Personal Investment Authority, IMRO and the Securities and Futures Authority. Who manages the funds... and are the managers regulated? The manager of the unit trusts and the authorised corporate director to the OEIC is Save & Prosper Securities Limited, which is regulated by the Personal Investment Authority and IMRO. The unit trusts and OEIC funds are marketed by Fleming Asset Management which is a trading name of Save & Prosper Group Limited, which is regulated by the Personal Investment Authority and MRO and is part of the Fleming Asset Management marketing group, which sells investments, life assurance and pension products. The is managed by Save & Prosper Equity Plan Managers Limited, which is regulated by IMRO. The registrar and administrator is Save & Prosper Group Limited. The auditors are Ernst & Young, Ten George Street, Edinburgh EH2 2DT. Premier Equity Income Fund The effect of charges on Premier Equity Income Fund is illustrated below as an example of how charges might affect an investment in one of our unit trusts which is designed to generate income. The effect of charges on a 1,000 unit trust investment in Premier Equity Income Fund, assuming a growth rate of 6% a year. If income is reinvested If income is received Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 1, , , , , , , , ,090 The last line in the table above shows that over 10 years the total effect of charges and expenses could amount to 371 if income is reinvested or 319 if income is received. In other words, if the growth rate were 6% a year, (which is not guaranteed) the deductions would have the effect of reducing that growth rate to 3.6%. The effect of charges on a 1,000 investment in Premier Equity Income Fund, assuming a growth rate of 7% a year. If income is reinvested If income is received Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 1, , , , , , , , ,150 The last line in the table above shows that over 10 years the total effect of charges and expenses could amount to 425 if income is reinvested or 360 if income is received. In other words, if the growth rate were 7% a year, (which is not guaranteed) the deductions would have the effect of reducing that growth rate to 4.4% if the income were reinvested, or 4.5% if the income were received. Income funds The table below shows the amount to which a 6% growth rate on a 1,000 unit trust investment and a 7% growth rate on a 1,000 investment would be reduced by the effect of charges and expenses. Unit trust Income Reinvested Income Received Income Reinvested Income Received Cash Fund 5.5% n/a n/a n/a Extra Income Fund 4.1% 4.2% 4.7% 4.8% High Income Fund 5.0% 5.0% 5.8% 5.8% International Bond Fund 4.5% 4.5% n/a n/a UK Growth & Income Fund 3.5% 3.6% 4.5% 4.5% Premier Equity Growth Fund The effect of charges on Premier Equity Growth Fund is illustrated below as an example of how charges might affect an investment in one of our unit trusts which is designed to generate growth. The effect of charges on a 1,000 unit trust investment in Premier Equity Growth Fund, assuming a growth rate of 6% a year. If income is reinvested If income is received Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 1, , , , , , , , , ,360 The last line in the table above shows that over 10 years the total effect of charges and expenses could amount to 362 if income is reinvested, or 352 if income is received. In other words, if the growth rate were 6% a year, (which is not guaranteed) the deductions would have the effect of reducing that growth rate to 3.6%. The effect of charges on a 1,000 investment in Premier Equity Growth Fund, assuming a growth rate of 7% a year. If income is reinvested If income is received Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 1, , , , , , , , , ,490 The last line in the table above shows that over 10 years the total effect of charges and expenses could amount to 399 if income is reinvested or 388 if the income is received. In other words, if the growth rate were 7% a year, (which is not guaranteed) the deductions would have the effect of reducing that growth rate to 4.6%. 5

7 The registered office of Save & Prosper Group Limited (Registered in England No ) and Save & Prosper Equity Plan Managers Limited (Registered in England No ) is: Finsbury Dials, 20 Finsbury Street, London EC2Y 9AY. Registered office of Save & Prosper Securities Limited (Registered in Scotland No ) is: 2 Festival Square, Edinburgh EH3 9SX. If any of these companies were to become insolvent, compensation may be available from: The Investors Compensation Scheme, The Cottons Centre, Cottons Lane, London SE1 2TB. (Telephone: ). Who do I approach if I need to complain? If you have cause to complain about any aspect of our service, we hope you will contact the Investment Product Services Department at our Client Administration Centre, Sovereign House, Western Road, Romford RM1 3SR. If we do not deal with your complaint to your satisfaction, you can complain to: The Investment Ombudsman, 6 Frederick s Place, London EC2R 8BT (Telephone: ) for complaints about how the investment is managed. Or The PIA Ombudsman, Hertsmere House, Hertsmere Road, London E14 4AB (Telephone: ) for complaints about how the investment was sold to you. Please note that making a complaint will not prejudice your right to take legal action. Where can I obtain further information about the funds? Further information about Save & Prosper s unit trusts is available in the form of Scheme Particulars and/or manager s reports. For The Fleming Investment Company ICVC, a copy of the Instrument of Incorporation is available at a cost of 10. Free copies of the company s prospectus and the interim and annual reports are also available. If you require any of this information, please contact your financial adviser or write to: Save & Prosper, Client Administration Centre, Sovereign House, Western Road, Romford RM1 3SS. Telephone: st October 1999 Growth funds The table below shows the amount to which a 6% growth rate on a 1,000 unit trust investment and a 7% growth rate on a 1,000 investment would be reduced by the effect of charges and expenses. Unit trust Income Reinvested Income Received Income Reinvested Income Received American Smaller Companies Fund 3.7% n/a 4.6% n/a China Dragon Fund 3.8% 3.8% 4.3% 4.4% Commodity Share Fund 3.8% 3.8% n/a n/a Emerging Markets Fund 3.8% 3.8% n/a n/a European Growth Fund 3.7% n/a 4.6% n/a European Smaller Companies Fund 3.7% n/a 4.5% n/a Financial Securities Fund 3.7% 3.7% 4.6% 4.6% Fleming Portfolio Fund 3.8% n/a 4.5% n/a Growth Fund 4.3% 4.3% 5.2% 5.2% Investment Trust Units 3.9% 3.9% 4.9% 4.9% Japan Growth Fund 3.8% n/a 4.7% n/a Korea Fund 3.2% n/a n/a n/a Latin America Fund 3.6% 3.6% n/a n/a Masterfund 4.2% 4.2% 5.1% 5.1% South East Asia Growth Fund 3.9% 3.9% 4.5% 4.5% UK Smaller Companies Fund 3.7% 3.7% 4.6% 4.6% United States Growth Fund 3.7% n/a 4.7% n/a OEIC funds The effect of charges on a 3,000 OEIC investment in Income Generator Fund, assuming a growth rate of 6% a year. Accumulation Shares Income Shares Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 3, , , , , , , , , , ,550 1, ,440 The last line in the table shows that over a 10 year period the effect of the total charges and expenses could amount to 819 for accumulation shares, or 657 for income shares. In other words, if the growth rate were 6% a year (which is not guaranteed), the deductions would have the effect of reducing that growth rate to 4.3% for accumulation shares, and 4.2% for income shares. The effect of charges on a 3,000 investment in Income Generator Fund, assuming a growth rate of 7% a year. Accumulation Shares Income Shares Effect of What you Effect of What you At end Investment deductions might deductions might of year: to date to date get back Income to date get back 1 3, , , , , , , ,810 1, , , ,980 2, ,280 The last line in the table shows that over a 10 year period the effect of the total charges and expenses could amount to 915 for accumulation shares, or 698 for income shares. In other words, if the growth rate were 7% a year (which is not guaranteed), the deductions would have the effect of reducing that growth rate to 5.2% for accumulation shares, and 5.1% for income shares. Fleming Fund Marketing is a trading name of Save & Prosper Group Limited which is regulated by the Personal Investment Authority and IMRO and is part of the Fleming Asset Management marketing group, which sells investments, life assurance and pension products. 6

8 Key Features of the Cash Component within The Fleming Asset Management Maxi Investing in the Cash Component within a Fleming Asset Management Maxi You can invest in the Cash Component within a Fleming Asset Management provided you have invested a minimum of 1,000 in the Stocks and Shares Component of the same. You cannot invest in the Cash Component only. Your Cash Component investment will be held in a deposit account with Robert Fleming & Co Ltd (an associate of Fleming Asset Management), an authorised institution under the Banking Act The Cash Component may not be appropriate for you, and you may want to seek financial advice before you invest. How much can I invest? The minimum amount you can invest in the Cash Component is 1. You must also invest a minimum lump sum of 1,000 or open a regular savings plan in the Stocks and Shares Component of the same. The maximum amount you can invest in the Cash Component is 3,000 in the 1999/2000 tax year, and 1,000 in each tax year thereafter. Your total investment in the including the Stocks and Shares Component must not exceed 7,000 in the 1999/2000 tax year, and 5,000 in each tax year thereafter. You can only invest a lump sum in the Cash Component. Regular monthly savings are not permitted. You can however make regular monthly savings into the Stocks and Shares Component of the same, subject to the availability of the fund you choose. You cannot invest in the Cash Component at all within the Fleming Asset Management Stocks and Shares Mini, although you can open a Cash Mini with another provider. How much interest will I earn? The interest rate on the Cash Component is variable and will appear on your account statements. Any changes to the interest rate will be advertised in the national newspapers. The Annual Effective Rate ( AER ) will not fall below the Robert Fleming base rate less 1% before 6 April Interest is accrued daily, starting on the fourth business day following the day on which we receive your cheque. Cheques received on a non-business day or after 9:30 am on a business day are treated as being received on the next business day. If you withdraw cash from your account, interest will cease to be earned on that cash from the business day on which we receive your withdrawal request. The interest is calculated and added to your account half-yearly, or when you close your Cash Component. The gross interest earned will be added to your account half-yearly on 31st March and 30th September each year. Alternatively, you can choose to have the interest paid direct to a bank or building society account. If you choose to have the interest paid to you, any income from your Stocks and Shares Component will also be paid to you rather than reinvested in your account. You cannot elect to receive interest and reinvest income, or vice versa. We will not deduct tax from the amount of interest calculated. When can I withdraw my money? You can request the withdrawal of some/all of your cash without penalty on any working day between 8:30am and 5pm. To do this, you can either: Ask your financial adviser to act on your behalf if you prefer, write to us with your instructions The minimum amount you can withdraw is 100 (or the balance of your account if less). When you withdraw cash, we will send you a statement confirming the transaction. We will send you the proceeds on the third business day after we receive your instructions. Instructions received after 9:30 am will be treated as received on the next business day. If you request a withdrawal from your Stocks and Shares Component at the same time, you will receive a separate payment, but you will receive the payments from both components on the same day. Withdrawals will be paid by direct credit to your bank or building society. If you prefer, you can request payment by cheque. If you want the account to remain open, you must leave a minimum balance of 1, as well as maintaining a minimum holding of 1,000 or a regular savings plan in the Stocks and Shares Component of the same. If the value of your holding in the Stocks and Shares Component falls below 1,000 as a result of a withdrawal, we reserve the right to close both the Stocks and Shares and Cash Components of your. How much will any advice cost? If you have arranged your investment through an independent financial adviser, Fleming Asset Management will not pay any commission in respect of your investment in the Cash Component. You should check with your financial adviser as you may be liable for the cost of any advice you receive Please note, however, that commission may be payable on your investment in the Stocks and Shares Component. For further details, see how much will any advice cost in the Key features on page 4. What are my cancellation rights? When we receive your original investment instructions to open your Cash Component we will send you a cancellation notice. You can cancel your investment in the Cash Component at any time in the 14 days after you receive the cancellation notice. If you cancel your investment, the full amount invested will be returned to you, plus interest (net of tax) earned up to the day we receive your cancellation notice. If you are a non-taxpayer you can reclaim the tax through your tax office. If you cancel your investment in the Cash Component you will also cancel any investment you made at the same time in the Stocks and Shares Component of the. Are there any compensation arrangements? If Robert Fleming & Co Ltd become insolvent, compensation may be available from: The Deposit Protection Scheme, 25 The North Colonnade, Canary Wharf, London E14 5HS. For the first 24 hours after we receive your cheque, your money is held by the manager, Save & Prosper Equity Plan Managers Limited. If the manager were to become insolvent during those 24 hours, you would not be covered by the terms of the Deposit Protection Scheme. 26th May

9 Customer Agreement This agreement details how your Individual Savings Account () works, what you can expect of us and what you have to do in return. It governs both your investment in unit trusts and any cash investment. Please read it before you invest. The terms of any application form on which you apply to open your or, if we accept your application during a telephone call, the terms and conditions explained to you during that call and sent to you afterwards, also form part of this agreement. Definitions we, our and us in this document refer to Save & Prosper Equity Plan Managers Limited (SPEPM), the manager of your, and any of its associated companies. SPEPM is regulated by IMRO. Robert Fleming means Robert Fleming & Co. Limited (Registered office 25 Copthall Avenue London EC2R 7DR), an authorised institution under the Banking Act 1987, and an associate of SPEPM. IMRO means the Investment Management Regulatory Organisation Limited or any successor to its functions. unit(s) refers to both units in a unit trust and shares in an Open Ended Investment Company (OEIC) and the words (unit) trust(s) likewise also include an OEIC. business day means any day on which we are open for business. associate or associated company means any holding company of ours or any subsidiary of any such holding company (as defined in the Companies Act 1985, as amended from time to time). manager means the manager of the unit trust in question and includes the Authorised Corporate Director of an OEIC. manager s report means both the biannual reports issued by a unit trust manager and those of an OEIC. bid (price) means the price at which you sell units back to us. offer (price) means the price, including any initial charge, at which you can buy units from us. Maxi means an that can invest in both units and cash. Mini means an that invests in units only. TESSA only means an that invests only the capital proceeds of a Tax Exempt Special Savings Account which has come to the end of its term. Your is managed in compliance with the Individual Savings Account Regulations 1998 (as amended from time to time). If these terms and conditions are inconsistent with those regulations, then the regulations shall prevail. This Agreement is governed by the law of England and Wales and subject to the jurisdiction of the English courts. Appointment 1. This Agreement is between you, the investor, SPEPM, and, in the case of the cash component, Robert Fleming. 2. Your invests in such unit trusts and OEICs as you have chosen on your application form and as we permit and, if you wish and subject to our agreement, in cash. 3. Other than a TESSA only, you may not open another at all with another manager in the same tax year in which you have subscribed to our Maxi or any other investing in stocks and shares in the tax year in which you subscribe to our Mini. 4. Your will start on our acceptance of your application in whatever form. If you wish to make regular subscriptions by direct debit, we will only open your account when we have your written instructions. Cancellation 5. You have the right to change your mind. If you do, you can cancel your subscription by giving us written notice within 14 days of your receipt of the cancellation notice which we will send you when we accept your subscription. We will return to you the lower of the amount you paid or the value of your units at the offer price on the day we receive your notice of cancellation. In the case of any cash in the cash component, we will return to you the sum you deposited with any net interest. Any cancellation will apply to all parts of your subscription. Unit Trust Dealing 6. Units will be purchased on the business day we accept your instructions. For instructions accepted before 9.30 am on that day, we will buy the units at the first offer price calculated that day, less any applicable discount. For instructions accepted after this time, we will buy units at the first offer price calculated on the next business day, less any applicable discount. If we cannot do this for any reason, we will buy units at the first practicable offer price after receipt of your instructions. We will invest distributions (unless you have asked us to pay income to you) at the relevant offer price calculated on the date the distribution is paid. Tax reclaims or any other cash, will be invested, within 3 business days of receipt. The minimum lump sum investment is 1,000 and the maximum 5,000 ( 7,000 in the 1999/2000 tax year) for our maxi and 3,000 for our Mini. 7. If you make regular monthly subscriptions by direct debit, these will be taken from your account on the 16th day of each month or the next business day, and units will be purchased on that day. The minimum subscription is as provided by us from time to time. You can alter the level of your subscription at any time, by written notice, but processing of revised instructions will normally take up to 5 business days after receipt. You cannot make such subscriptions into the Fleming Portfolio Fund. 8. If you wish to switch from one trust to another, this will be on a bid to offer price basis. We may give a discount at our discretion. If a discount would be greater than or equal to any initial charge, there will instead be no initial charge. If switch instructions are accepted before 9.30 am on a business day, the switch will be carried out at the first bid/offer prices calculated on that day, less any applicable discount. If instructions are accepted after this time, the switch will be carried out at the first bid/offer prices calculated on the next business day, less any applicable discount. If we cannot do this for any reason, we will carry out the switch at the first practicable bid/offer prices after receipt of your instructions. 9. We buy and sell units daily from or to Save & Prosper Securities Limited, an associate, which is the manager of the unit trust(s). 10. Any cash balances arising in connection with your holding of units will be held in a non interest bearing client account with Robert Fleming. For The Cash Component Only 11. You may only invest in the cash component if you have also invested in the unit trust element of the. The minimum investment is 1 and the maximum 1000 ( 3000 in the 1999/2000 tax year). 12. The cash component of your will be held in an interest bearing account, in your name, with Robert Fleming, which holds the money as principal and accepts responsibility for the cash when held with it. 13. Cash may be deposited with us using any of the methods outlined on your application form. 14. Interest rates on this account will vary from time to time and may be changed without prior notice. Robert Fleming will announce any changes by advertisement in national newspapers. 15. Interest will be earned from the fourth business day following the day (or next business day if this day is not a business day) on which we receive your cash investment. Investments received by us after 9.30 am will be deemed to be received on the next business day. If you withdraw any cash, interest ceases to be earned on that cash on the business day on which we receive your instructions. 16. Interest will be credited to your account half-yearly and will be paid to you if you wish as outlined in clause 23. Information 17. We will send you details of any lump sum purchases or cash payments to your, of any sales or lump sum cash withdrawals or of any switch to another trust within 5 business days of their taking place. 18. We will send you a statement twice a year which will include a summary of the holdings in your, a valuation, particulars of all transactions, the average rate of interest paid on any cash component and income received since the previous statement, or the start of your if that is later. 19. We will also send you the manager s reports for your unit trust(s) and any other literature that would be sent to unitholders, so you can keep up to date with your investment. On your written request and at your expense, we will arrange for you to attend unitholders or shareholders meetings and to exercise your vote at them. Withdrawals, Closures & Transfers 20. We will sell all or part of your holding on the business day we accept your instructions. If you instruct us to sell units over the telephone, we reserve the right to ask for written confirmation. For instructions received before 9.30 am on that day we will sell the units at the first bid price calculated that day. For instructions received after that time, we will sell units at the first bid price calculated on the next business day. If we cannot do this for any reason, we will sell units at the first practicable bid price after acceptance of your instructions. We will send you the proceeds within 5 days of our acceptance of your written instructions. 21. If you wish to sell units held in your, you must withdraw units to a value of at least 100. If, as a result of a withdrawal, the value of your units in your fall below 1,000 or you cease to pay monthly instalments before your is worth 1,000, we reserve the right to close your entire. The minimum amount you can withdraw from the cash component is 100, or the balance of your account if less. We will send you the proceeds on the third business day after we receive your instructions. Instructions received after 9.30 am will be treated as received on the next business day. If you request a withdrawal from your units and cash components at the same time, you will receive separate payments on the same day. If the value of the cash component falls below 1 we reserve the right to close the cash component only. 22. You or we may terminate this agreement by written notice, subject to the completion of, and payment for, any outstanding transactions. If possible, we will give you 30 days notice of our intention to do so. 23. You may request that income from your is paid to you. This instruction will apply to all of your : you cannot have income paid from one component and not from another. We will send all income and the value of any associated tax credit directly to your nominated bank account within 5 business days of the income being received by us. If you wish to change your arrangements, you must tell us in writing. 24. We will accept a transfer into your of all or part of an held with another manager. Likewise, on your written request, we will transfer all or part of your to another manager. We will only accept or make transfers in cash. 25. We will tell you if your is, or has become, void for any reason. We will act upon your instructions to sell, transfer or otherwise deal with the contents of your void within 5 business days of their receipt. If you do not give us any instructions, we reserve the right to sell all investments and return the proceeds and any cash to you, after deduction of any tax liabilities. Charges 26. The only charges for your are those levied upon the trust(s), as laid out in the manager s literature and Key Features describing the trust. There are no charges upon the cash component. 27. If there is insufficient cash in your to pay our charges or any tax we have to pay or repay, we may at our discretion sell any of your investments to clear the position. Notices & Instructions 28. We will send any notices, statements and other correspondence to the address on your application form or the last permanent address notified to us. Please advise us as soon as possible if your address changes. 29. You should send any notices or instructions to Save & Prosper s, Sovereign House, Western Road, Romford RM1 3SS. 30. We may contact you other than in writing to obtain your instructions regarding your. Telephone calls may be recorded in order to resolve any problems which may occur. If you purchase any investments or make any other agreement during or as a result of these calls or another unsolicited call from us, you will forfeit your right under s56 of the Financial Services Act 1986 to treat that purchase or agreement as unenforceable. 31. In the event of your death, we will act on the instructions of your authorised personal representative. General 32. You remain the beneficial owner of your, but any units purchased will be registered in the name of Fleming Nominees Limited, an associate for whom we accept liability. Please note that not all your investments may be identifiable by separate certificates or other physical documents of title and so if we cannot make up any shortfall, it will be shared pro rata amongst all such investors. 33. Under this Agreement, you authorise us to reclaim from the Inland Revenue all tax credits on dividends and other distributions for credit to your or for our reimbursement when we have prefunded a tax credit. 34. We may deal or place funds for your with any associates, either as principal or agent, and we do not have to account to you for any benefit that we or they may obtain. 35. We are not liable for any loss on your, however it may arise, unless it was caused by our negligence or wilful default. 36. You are not able to borrow money using your as security. Likewise, we will not lend or use as collateral any of your investments or documents of title relating to them. 37. Information about complaints procedures and compensation in the event of our insolvency can be found in the Key Features supplied to you with this agreement. You also have a right of complaint to the Investment Ombudsman. 38. In performing any services in relation to your we may act through our officers, employees or agents, delegate any authority to any person and engage the services of any person, including an associate. We will satisfy ourselves that any such persons are competent to carry out their functions. 39. You authorise us to disclose to the Inland Revenue, any regulatory authority, the police or other such persons such information as they may be entitled to obtain in relation to you and your account. 40. We may change this agreement on giving you reasonable notice in writing in the event of legal or regulatory changes, changes in market practice or if we decide to change any aspect of the service or the manner in which we provide it for operational reasons, provided that such change is not materially detrimental to you. 30th June