OLD MUTUAL INVESTMENT FUNDS SIMPLIFIED PROSPECTUS April 2011 This document includes the key features of the funds, and the terms and conditions for ISA investors, to help you decide whether to invest in one or more of the funds. You will find details of our income and growth funds inside, as well as how to invest a lump sum or set up a monthly savings plan.
Simplified prospectus of the Old Mutual Investment Funds Series I, II and III
Contents Introduction 1 Which funds are referred to in this document? 1 Why do I need to read this document? 1 How do I get more information? 1 How do I contact Old Mutual Fund Managers? 1 Fund aims 2 Your investment 2 What are the investment limits? 2 Risk factors 3 Risks applying to all funds 3 Risks applying to specific funds 4 Your questions answered 4 How much will any advice cost? 4 Who is a typical investor? 5 How do I invest? 5 How do I know that you have invested my money? 5 What if I change my mind after I apply? 6 How do I increase my investment? 6 How can I track my investment? 6 Can I receive income from my investment? 6 Can I switch between funds? 7 How is my investment priced? 7 How do I reduce or stop monthly payments? 7 How do I sell my investment? 7 Will I have to pay tax? 7 How will charges and expenses affect my investment? 8 If something goes wrong, will I get compensation? 9 What if I have a complaint? 9 What if I die while my investment is in force? 9 Additional information 10 ISA terms and conditions 12 Appendix 1: key data table 14 Appendix 2: fund aims 16 Appendix 3: effect of charges and expenses 18 Appendix 4: historic performance 22 Application forms 25 Glossary 31 Investor Services Team: 0808 100 8808
Simplified prospectus of the Old Mutual Investment Funds Series I, II and III
Introduction Which funds are referred to in this document? Old Mutual Investment Funds Series I Old Mutual Corporate Bond Fund Old Mutual Dynamic Bond Fund Old Mutual Equity Income Fund Old Mutual Extra Income Fund* Old Mutual UK Select Mid Cap Fund Old Mutual UK Select Smaller Companies Fund Old Mutual Investment Funds Series II Old Mutual Asian Select Fund Old Mutual European Equity Fund Old Mutual Global Equity Fund Old Mutual Global Strategic Bond Fund Old Mutual Japanese Select Fund Old Mutual North American Equity Fund Old Mutual UK Select Equity Fund Old Mutual Investment Funds Series III Old Mutual Select Managed Fund Why do I need to read this document? This document tells you about the range of investment funds we offer for retail investors, to help you to decide if you want to invest in any of the funds. The funds described here are all collective investment schemes, which means that all the investors' money is pooled together under the management of a professional fund manager. Each fund is managed separately, with its own investment aim. There is a glossary on page 31 where you will find explanations of the terms we use in this document. This document explains the key features of the funds, their investment aims and the possible risks associated with investing in them. It also answers other questions and provides information to help you make a decision. You should read and fully understand all the information provided here, particularly the risks associated with investing, before you decide whether to invest. If you decide to invest in an ISA, or transfer an existing ISA investment to us, you must also read and understand the ISA terms and conditions on pages 12 and 13. If you decide to invest, you should keep this document as you may need to refer to it in the future. We recommend that you get advice from an authorised professional adviser before making any decision about investments. As far as we know, the information we have given here is correct as at April 2011 but you should remember that minimum investment limits, fund charges and other terms can change. How do I get more information? Details of the individual funds are given in the appendices from page 14 onwards. For more information, please contact an authorised professional adviser or call our Investor Services Team on the number shown below. We can answer your questions about our fund range, but we cannot give you investment advice. You can also find more information on our website (www.omam.co.uk), including factsheets showing the most up to date information for each fund, and the latest yearly and half-yearly fund reports. You can find more information on all the funds, including the risks associated with investing in them, in the relevant full prospectus. Please contact us if you would like a free copy. If there is anything you do not understand in this document, we recommend that you get advice from an authorised professional adviser. How do I contact Old Mutual Fund Managers? Investor Services Team (freephone): 0808 100 8808 Website: www.omam.co.uk Investor Services Team Old Mutual Fund Managers Limited FREEPOST RRYH-XTSY-HEZH PO Box 10278 Chelmsford CM99 2AR Please note that we record all phone calls for security purposes and to improve our customer service. *The Old Mutual Extra Income Fund has been merged into the Old Mutual Equity Income Fund. It is no longer possible to invest in the Old Mutual Extra Income Fund. Investor Services Team: 0808 100 8808 1
Fund aims Each fund has its own specific investment aim, which is shown in appendix 2 of this document. You should read the fund aims carefully to help you decide whether to invest. We can sum up the aims of the investment range as a whole as follows: To give you access to investments linked to country, regional and global financial markets To target long term capital growth, a regular income or a combination of both To spread the risk by investing in different funds which meet your investment aims To offer you the option of switching funds as your investment aims change To provide access to tax-efficient investment through the ISA option Your investment The funds are invested in different financial markets depending on their individual aims. Investments in financial markets are generally considered to be medium to long term. We believe that you should hold these investments for at least five years. Within the investment limits referred to in the next section, you can invest in one or more of our funds, either by a lump sum or by a regular monthly savings plan. You can invest in all the funds featured here through a tax-efficient ISA, and you may also transfer existing ISAs from other managers into our funds. You can top up your investment at any time and make withdrawals, subject to the investment limits. The funds may issue different classes of shares to suit different types of investor. This document gives information on class A shares, which are designed for retail investors. We offer income shares (which means any income they earn is paid to you), or accumulation shares (where any income earned is retained within the shares, leading to a higher share price). Appendix 1 on page 14 shows the shares available within each fund. Some funds may offer class B (or broker) shares. These shares are only available to investors who subscribe via an authorised financial adviser or stockbroker who has agreed specific terms of business with us. Some funds may offer class C (or institutional) shares. These shares are only available to institutional investors who have agreed specific terms of business with us. For more information on class B and class C shares, please refer to the full prospectus, or call your authorised professional adviser or our Investor Services Team. All funds can use derivatives for efficient portfolio management. Efficient portfolio management includes derivative transactions entered into for one of the following aims: reduction in risk; reduction in cost; generation of additional capital or income for the funds with an appropriate level of risk; or their risks are adequately captured by the risk management process for the funds. Some funds use derivative instruments for investment purposes. Please refer to appendix 2 to see which funds this applies to. What are the investment limits? For class A shares in all of our funds you have to make a minimum initial investment of 1000 as a lump sum, or 250 a month for a monthly savings plan. To top up your existing investments, the minimum is 500 for lump sums, and 50 a month for monthly savings plans. If you want to withdraw money from your investment, you must withdraw at least 250 at a time, and the value of your remaining investment must be at least 1000. These limits also apply to ISA investments. ISAs must also comply with the Government's rules, which allow a maximum ISA investment of 10,680 in the current (2011/2012) tax year. You can invest the full 10,680 in a stocks and shares ISA, or you can invest up to 5,340 in cash with an ISA manager, and invest the rest of the 10,680 in stocks and shares with the same or a different ISA manager. We only offer stocks and shares ISAs. For more information about ISAs, please see the ISA terms and conditions on pages 12 and 13. There are no limits on the value of ISA investments that you can transfer from earlier tax years. 2 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
For details on how to invest in the funds, please see the section called Your questions answered, from page 4 onwards. The number of shares available for the Old Mutual UK Select Smaller Companies Fund is limited. Shares may become available for new investment at times. You should contact your authorised professional adviser or our Investor Services Team for more information. Risk factors All investments in financial markets involves risk, so you need to understand all the risks associated with any fund you invest in. Some risks apply to all of our funds, others to just some of the funds. Please refer to appendix 2 on pages 16 and 17 to see which risks apply to the funds you are considering. Details of all risks can be found in the Full Prospectus. Risks applying to all funds Past performance is not a guide to future performance. The value of your investment and the income from it can fall as well as rise and you may not get back the amount you originally invested. We cannot guarantee either the performance or the income from any fund. The performance of any fund can differ considerably from that of its benchmark index or other funds investing in the same sector. If you had to pay an initial charge on your investment and you sell your shares after a fairly short time, you may not get back the amount you invested even if the value of the investment has not fallen. For funds where we take the annual management charge from the income, if the fund has not generated enough income, the balance may have to come from the capital of the fund. This does not apply to the Old Mutual Equity Income Fund and the Old Mutual Extra Income Fund. If you qualify for cancellation rights and you decide to cancel your investment, you will get back less than the original amount if the investment has fallen in value since you invested. Inflation will reduce the buying power of your investment over time. If you invest for a particular reason (for example to pay off a mortgage), you may not achieve your target amount if you do not keep up with your contributions or if the investment value does not sufficiently increase. Any tax benefits that apply at the time of your investment may be affected by changes in government policy or in your personal circumstances. If you transfer ISAs into our funds from a different fund manager, there will be a period of time (usually only a few days) during the transfer when your investment is in cash and so will not be invested in the financial markets, leading to a potential for loss of income and growth. Funds offering the possibility of higher returns are generally higher risk as far as your investments are concerned. On occasion, we may not be able to sell the underlying asset in a fund as quickly as we would like, or at a reasonable price. This liquidity risk could affect the performance of the fund. Although unlikely, it is possible that the issuer of an asset, or a counterparty, may default on their obligations to pay. In the unlikely event that a fund was not able to meet its financial responsibilities, the legal structure of an open ended investment company (OEIC) means that other funds within the OEIC may meet those responsibilities. However, investors are not responsible for the debts of the funds, and you will not need to make any further payments after you have bought shares. Our funds are 'dual priced'. This means there are two prices - a price at which we sell the shares (the offer price) and a lower price at which we buy them back from investors (the bid price). The difference between these two prices is called the 'spread'. You will incur a loss if the bid price at which you sell is lower than the offer price at which you originally bought the shares. Investor Services Team: 0808 100 8808 3
Risks applying to specific funds The following risks apply to one or more of the funds rather than to the full fund range. You should check the fund aims in appendix 2 to see which risks apply to the funds you are considering. A Currencies in overseas markets Funds investing in overseas securities (for example, stocks and shares) are exposed to, and may hold, currencies other than sterling. As a result, movements in exchange rates as well as in asset prices may affect your investment. The funds will fall in value if sterling rises in value relative to the currencies in which investments are made. B Deduction of charges from capital Where we take the annual management charge from the capital part of the fund, rather than the income, then the income available for distribution to investors does not decrease, but the capital value of the fund decreases. This applies to the Old Mutual Equity Income Fund and the Old Mutual Extra Income Fund. C Derivative instruments for investment purposes Some of the funds can use derivatives for investment purposes (such as trying to achieve higher returns). This may increase the volatility of the funds (so the price of shares may fall or rise more sharply) and their risk profile may change. D Lower diversification (spread of risk) Some funds may have a portfolio of assets which is concentrated in individual countries, companies or market sectors. If one of these investments fell sharply in value, this would have a greater effect than would be the case in a more diversified portfolio where the risk is more widely spread. E Smaller companies Investing in smaller companies can be more risky than investing in larger companies, because there is a more limited market for the shares, and the share prices may fall or rise more sharply. F Emerging markets Emerging markets are smaller than well established financial markets, and they may experience greater price volatility (sharp rises and falls in price) and lower trading volumes than more developed markets (so there are fewer buyers and sellers of shares). In addition, some emerging markets have less regulatory control and less supervision of their financial markets, and consequently less investor protection. Transaction costs, commissions and local taxes may be higher than in more developed financial markets. G Investment in bonds Bond funds may be affected by changes (real or expected) in the rate of inflation or interest rates. If interest rates rise, the fixed income earned from bonds becomes less attractive to investors, so the demand for bonds may fall and their capital value may decrease. Some funds invest in bonds which offer higher yields, but which are considered to be more risky than investmentgrade bonds. This is because the issuer of the bond may be less likely to pay the periodic interest payments or the capital due on maturity. This means it may be more difficult to sell higher-yielding bonds. The Old Mutual Global Strategic Bond Fund and the Old Mutual Dynamic Bond Fund, and up to 20% of the Old Mutual Corporate Bond Fund, may be invested in higher yielding bonds. Your questions answered How much will any advice cost? Your authorised professional adviser will give you details about how much they charge. They may charge you a fee, or they may get commission from us. If we pay initial commission to your adviser, we will take it from the initial charge and, if we pay your adviser renewal commission for servicing your holdings with us, we will take it from the annual management charge made on your investment. This means you will not pay the cost of the commission payments directly. We usually pay a financial adviser 3.0% of an investment initially and 0.5% annually. Your authorised professional adviser will give you full details of the amount of commission they receive for your investment. The amount will depend on the size of your investment and how long you stay invested. 4 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
If you do not have an authorised professional adviser, we recommend that you visit www.unbiased.co.uk for details of authorised professional advisers in your area. Who is a typical investor? The funds invest in financial markets that can go down as well as up, so typical investors are likely to invest their money over five years or more, without needing to cash in their investment on a specific date. Investors may already have savings where the capital (the original investment) is protected, and they now want to invest to target higher returns or income, and are willing to accept the risk of losing capital. Whether a fund would be appropriate for you will depend on your own needs and how much risk you are willing to take. Advice from an authorised professional adviser will help you to decide. How do I invest? Investments outside of an ISA For lump sum investments, you can buy shares by calling our dealing desk on 0808 100 3579 (freephone) between 8.00am and 5.30pm on any weekday (except bank holidays). We will send you a contract note showing how much you need to pay. You must make your payment within four working days of the date on the contract. If you prefer to buy your shares by post, you can send us your application form and a cheque made payable to Old Mutual Fund Managers Limited. For investments in a monthly savings plan, you can only buy shares by filling in the application form, including the direct debit instruction, and sending it to us by post. The payments will come out of your account on the 5th of each month. We need to receive your application form by the 14th of the month so that we can start taking payments from the next month. The fund is valued at 12:00 noon each business day (this is known as the valuation point). The price you pay for shares is set at the next valuation point after we receive your application form. We use the valuation point to calculate the bid and offer prices for shares. The bid price is used when you sell (or redeem) shares back to us, and the offer price is the price at which we sell shares to you. You must tell us if the shares will ultimately be owned by a person ( the beneficial owner ) other than the one named on the application form. There is space on the form for you to do this. Investments in an ISA You can only invest in ISAs by filling in and returning the appropriate application form. For lump sum ISA investments, you should enclose a cheque with your application form, payable to Old Mutual Fund Managers Limited. For regular savings plan ISA investments, you must fill in the direct debit instruction on the application form. The payments will come out of your account on the 1st of each month (or the next business day). We need to receive your application form by the 14th of the month so that we can start taking payments the next month. You can transfer ISA investments to us from another plan manager by filling in the appropriate application form. The ISA investment allowance is 10,680 for the 2011/2012 tax year. This means that you can save up to 10,680 in a stocks and shares ISA with one provider and, of that allowance, you can save up to half ( 5,340) in a cash ISA with the same or a different provider. We do not offer cash ISAs. You can transfer money you have saved in a cash ISA to a stocks and shares ISA. The fund is valued at 12:00 noon each working day (known as the valuation point). The price you pay for shares is set at the next valuation point after we receive your application form. Please see the ISA terms and conditions on pages 12 and 13 for more information. How do I know that you have invested my money? If you are investing a lump sum, we will send you and your authorised professional adviser a contract note showing the number of shares you have, and the price and date on which you bought them. We will post this contract note on the next business day after the date of your investment. We do not issue share certificates but we will send you statements twice a year showing the shares you own and the value of your investment. Investor Services Team: 0808 100 8808 5
If you set up a monthly savings plan, we will collect your monthly contribution by direct debit on the 5th of each month (or the 1st of each month for ISAs), or on the next working day. We will buy shares on the same day as we receive your payment, and we will write to you to confirm that we have received your investment application. We will not send you a contract note for each monthly investment, but you will get a statement every six months showing how much you have invested and how many shares have been allocated to your account each month. If we hold uninvested cash for you (such as income from a fund awaiting distribution to investors), the cash will be held in a client money account. No interest is paid on the cash in these accounts. What if I change my mind after I apply? If you received advice from an authorised professional adviser before making an investment, you will have the right to cancel your investment. We will send you a cancellation notice, which you need to fill in and return to us within 14 days of receiving it. If you cancel your investment, you will get back either the full amount you invested or, if the buying price has fallen since your investment, we will reduce your refund by the amount of the fall. If you do not cancel within 14 days of receiving the form, you will not be able to cancel your investment. How do I increase my investment? To increase your investment, please send us a cheque (payable to Old Mutual Fund Managers Limited) with your instructions, and include your account number. For minimum top-up investment levels (and maximum investment levels for ISAs), please see the table in appendix 1. How can I track my investment? We will send you two statements each year, dated 30 April and 31 October, within one month of these dates. The statements will show any transactions during the period and the value of your investments as at the date of the statement. Our Investor Services Team can also give you a valuation of your investments. You can call them from Monday to Friday between 8:00am and 5.30pm on (freephone) 0808 100 8808. Fund prices are updated each day on our website at www.omam.co.uk. We will send you yearly and half-yearly short reports for all of the funds you have invested in. These reports provide details of each fund s performance, an investment review for the reporting period, and details of the largest investments in the fund portfolio. We prepare all reports to investors in this format, but you can see the full report and accounts by contacting us to ask for a copy or by visiting our website at www.omam.co.uk. Can I receive income from my investment? If you would like to receive income from your investment, you should apply for income shares and remember to fill in the 'income payments' section on the application form. You must give us your bank or building society account details so that we can pay in your income. If we do not have your account details, we will automatically put your investments into accumulation shares. When we pay you income from a fund, you will receive a tax voucher (or a distribution notification for ISA investments) showing what income you have received. You should keep the tax voucher for your records. Income shares are not available to monthly savers. Not all funds offer income shares so you will need to check the table in appendix 1 (page 15) to see which funds offer them. We cannot automatically reinvest income from your income shares into your account. The income from accumulation shares is retained within the fund and not paid out. The value of your holding in accumulation shares will therefore rise as the income is retained and subsequently reflected in a higher share price. You will still receive a tax voucher. The income from bond funds used to be accounted for, and distributed, on the basis of the coupon income receivable. Following changes in accounting rules introduced in 2007, we account for income from bonds on an effective yield basis, which takes account of the income expected over the life of the bond. This differs from the coupon basis, which took no account of any difference between the purchase price of the bond and its final sale amount. 6 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
Can I switch between funds? You can switch between funds at any time, as long as your investment in any fund does not fall below 1000. By switching between funds, you are actually selling and then buying shares, so you may have to pay capital gains tax on the sale part of the transaction. If you switch from income shares to accumulation shares, you will no longer receive the income because it is retained in the fund and reflected in the increased price of the shares. You may have to pay charges to switch between funds. For more information, please contact your authorised professional adviser or our Investor Services Team. How is my investment priced? We work out the price of shares in each fund each day at 12:00 noon. The price is directly related to the value of the assets held by the fund, and is calculated according to the number of shares in issue. Our funds are dual priced. This means there are two prices a price at which we sell the shares (the offer price) and a price at which we buy them back from investors (the bid price). At any given valuation point, the offer price will usually be higher than the bid price. Latest prices are available on our website at www.omam.co.uk. We buy or sell shares on a forward basis, which means that whether you are buying or selling, your deal will be priced at the next 12:00 noon valuation point after we receive your instructions. There is more information on the pricing of our fund range in our full prospectus. Please contact us if you would like a copy. How do I reduce or stop monthly payments? You should write to us if you want to reduce or stop your monthly investment. You can only reduce monthly investments by multiples of 10, down to the minimum payment of 250 a month. If your account is worth more than the 1000 minimum, you can stop your contributions either temporarily or permanently. If you want to start investing again in the future, you may have to fill in a new application form. If your account is worth less than the 1000 minimum, you can stop paying contributions for up to three months, but after that we may decide to sell your shares and return the proceeds to you. Please note that if you stop making your contributions shortly before a collection date, we may not be able to stop the direct debit being collected. We will refund your contribution if necessary. How do I sell my investment? You can instruct us to sell all or part of your investment over the phone or in writing. You must sell at least 250 of your investment, and the value of your remaining shares must be at least 1000 (unless you sell all of your investment). If you give us your instructions over the phone, we will send you a contract note and renunciation form. You should fill in the renunciation form and return it to us. We will send a cheque to you (or your authorised professional adviser) within four business days of receiving your form. If you give us your instructions in writing, we will send the payment to you or your adviser within the same timescale. Please note that selling your shares will have no effect on the ISA investment limits. If you have invested up to the ISA limit, you cannot make any further investments in that tax year, whether or not you have sold all or part of your investment. We must act in line with UK laws designed to prevent money laundering. This means that we must have satisfactory proof of identity in order to release funds to you. If you need more information about selling your shares, please contact your authorised professional adviser or call our Investor Services Team on (freephone) 0808 100 8808. Will I have to pay tax? If you are resident or ordinarily resident in the UK (as defined by HM Revenue & Customs) you may have to pay capital gains tax when you sell shares or switch them into a different fund. Tax will already have been deducted from income distributions paid to you or retained within your accumulation shares. However, if you are a higher rate taxpayer you may have to pay further income tax on your distributions. If you are an ISA investor, you do not have to pay capital gains tax on your profits or any further income tax, and you do not need to refer to your ISA on your annual tax return. Investor Services Team: 0808 100 8808 7
Your tax position depends on the tax law that applies to your personal circumstances. If you are not sure about your tax position, you should get advice from an authorised professional adviser. For more information on how our funds are taxed, please ask us for a copy of the full prospectus. How will charges and expenses affect my investment? Your investment will be affected by charges and expenses involved in the management of the funds. In this section we give you information about these charges and, in appendix 3, we give examples of how they can affect investments in the individual funds. We use the class A retail shares in these examples. Initial charge You may need to pay an initial investment charge, usually 4.0% of the value of your investment for equity funds and 3.5% for bond funds. You will find details of the charges in appendix 1. We may pay some of this charge to your authorised professional adviser as commission (depending on the individual agreement between you and your adviser). Annual management charge We charge an annual fee for managing our funds, and we take this fee directly from the funds. We show the annual fee as a percentage of your investment. The amount of this fee varies depending on the fund, and you will find details in appendix 1. We may pay some of the annual management charge to your authorised professional adviser by way of renewal commission, which is paid every six months. This commission is a payment to the adviser for servicing your holdings with us. We may rebate some or all of this commission, depending on the agreement between you and your adviser. Administration fee The registrar receives an administration fee of 0.15% a year of the value of an equity fund and 0.10% a year of the value of bond funds. We review these fees each year and shareholders are told about any changes in the next yearly or half-yearly report and accounts. Stamp duty reserve tax (SDRT) We must pay 0.5% stamp duty reserve tax (SDRT) on some share transactions. This charge will reduce the performance of the fund. We will usually deduct the cost of SDRT straight from the fund s assets, but we may charge SDRT directly to investors when they sell shares in a fund where the value is greater than 2% of the shares in issue on the date of the transaction. SDRT is explained in more detail in the full prospectus. If you would like a copy, please ask us. Portfolio dealing costs When we buy or sell assets in the funds there may be fees or dealing commission to pay to the brokers through which the deals are placed. We may use research supplied by an independent broker when we decide to buy or sell assets in the funds. However, we may effect the deal through a different broker in order to secure the best execution as required by our regulator, the Financial Services Authority. Where this is the case, we may ask the broker through which the deal is executed to pay some of its dealing commission to the relevant research provider. This is known as a commission sharing arrangement. Neither the fund nor the investor incurs any additional charge for this arrangement. Other expenses There are other expenses involved in the day to day running of the funds, such as fees to the depositary for the safekeeping of the funds' assets, and fees to the auditors. We charge these expenses directly to the funds. These expenses are included in the total expense ratio (TER) calculations. Total expense ratio (TER) The total expense ratio (TER) shows the annual costs of managing the fund, given as a percentage of the fund's total assets. It does not include the fund's initial charge and transaction expenses, but it does include the other expenses mentioned in the previous paragraph and the annual management charge for each fund. We work out the TER using the latest published report and accounts for the funds. The TER is accepted internationally as a way of showing the fund's operating costs. 8 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
Reduction in yield Charges and expenses will affect the performance of the funds, reducing the total return you will get on your investment. We have included some examples later in this document to show how these charges and expenses could affect the funds, by using a sample rate of return as an example. The effect over 10 years on the performance of an initial 1000 investment is shown in appendix 1. There are more detailed examples in appendix 3. Of course, the figures shown in our examples are not guaranteed and only show the possible effect of charges and expenses on an investment. Also, the costs of dealing in the funds underlying investments are not included. The figures are based on an assumed growth rate, in line with guidance from the Financial Services Authority that regulates us, and we have not taken actual past performance of the funds into account. The information we have given about charges and expenses for the funds is correct as at each fund s latest audited report and accounts. If something goes wrong, will I get compensation? The Financial Services Compensation Scheme offers compensation when an authorised firm cannot pay claims made against it, usually because it has gone out of business. We are covered by the Financial Services Compensation Scheme. This means that you may be entitled to compensation if we cannot pay you what we owe. Most types of investment business are covered for 100% of the first 50,000 per person, per firm. You can ask us for a leaflet giving details of the scheme. For more information, you can contact the Financial Services Authority and the Financial Services Compensation Scheme: What if I have a complaint? If you want to complain about any aspect of our service, please write to us at: Old Mutual Fund Managers FREEPOST RRYH-XTSY-HEZH PO Box 10278 Chelmsford CM99 2AR We will deal with all complaints in line with our complaints handling procedures. You can ask us for a free copy of these procedures if you want to know more. If you are unhappy with the way we have handled your complaint, you can contact the Financial Ombudsman Service. The ombudsman is an independent organisation set up to help sort out complaints about financial services. You can contact the ombudsman at: Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR Phone: 0845 080 1800 What if I die while my investment is in force? Once we have been told of your death, the investment will continue until we receive written instructions from your executors or personal representatives about selling or transferring your shares. If you had invested in ISAs, there would be tax to pay on the income and capital gains from the date of your death. Financial Services Compensation Scheme 7th floor, Lloyds Chambers Portsoken Street London E1 8BN Phone: 0800 678 1100 Investor Services Team: 0808 100 8808 9
Additional information All our communications relating to Old Mutual Fund Managers (OMFM) investments will be in English. Governing law This agreement is construed in accordance with the law of England and Wales. Legal information about the funds This simplified prospectus contains key information about Old Mutual Investment Funds Series I, II and III. All three are subject to the prevailing UK tax regime and are UCITS schemes and open ended investment companies (OEICs), and they were authorised and incorporated in England and Wales on 22 June 2007 under registered numbers IC000543, IC000544 and IC000545 by the Financial Services Authority (the FSA). The FSA's address is: 25 The North Colonnade Canary Wharf London E14 5HS Authorised Corporate Director The Authorised Corporate Director (ACD) that manages the funds is: Old Mutual Fund Managers Limited 2 Lambeth Hill London EC4V 4AD Old Mutual Fund Managers Limited is authorised and regulated by the Financial Services Authority to carry out investment business. Investment adviser The company which is investment adviser to the funds is: Old Mutual Asset Managers (UK) Limited 2 Lambeth Hill London EC4P 4WR Depositary A depositary is responsible for the safekeeping of the funds' assets. Our depositary is: The Royal Bank of Scotland plc 36 St Andrew Square Edinburgh EH2 2YB Auditor The funds are audited by: KPMG LLP 8 Salisbury Square London EC4Y 8BB Full prospectus You may want to read the full prospectus before you make a decision about your investment. You can get a free copy from us by calling 0808 100 8808, or by downloading it from our website at www.omam.co.uk. We record phone calls for security purposes and to improve our customer service. Money laundering We must act in line with UK laws designed to prevent money laundering. This means that we must have satisfactory proof of identity in order to release funds to you. Personal information We will only pass on information about your investment directly to you or to your authorised professional adviser, unless you tell us in writing to share information with someone else. However, we will pass on confidential information about your account if we have to do so by law, or we are called to do so by the FSA (which regulates us), or by HM Revenue & Customs. 10 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
Data Protection Act Under this Act, we will hold any details that we receive about you on a database and we may use this information to keep you informed about other products and services we offer, or that are offered by other companies within the Old Mutual Group and other organisations that we think would be of interest to you. You can choose not to receive this sort of information by ticking the appropriate box on your application form. You can also tell us at any time, in writing, if you do not want to receive this sort of information. We, and other companies within the Old Mutual Group, may need to disclose your personal data to service providers, agents and sub contractors providing services to us abroad, in countries which do not have data protection laws offering the same level of protection as those in the European Economic Area (EEA). If we do so, we will ensure that your personal data is processed only in accordance with the applicable legislation and under suitable obligations of confidentiality. Legal responsibility We, and any of our associates, will not be legally liable for any actions or omissions of any person, firm or company who has carried out any transactions for your account. We, and any of our associates, will not be legally liable for any loss that you suffer except to the extent that it is directly caused by our negligence, wilful default or fraud. The Direct Debit Guarantee This Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits. If there are any changes to the amount, date or frequency of your Direct Debit Old Mutual Fund Managers Limited will notify you 10 working days in advance of your account being debited or as otherwise agreed. If you request Old Mutual Fund Managers Limited to collect a payment, confirmation of the amount and date will be given to you at the time of the request. If an error is made in the payment of your Direct Debit, by Old Mutual Fund Managers Limited or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society If you receive a refund you are not entitled to, you must pay it back when Old Mutual Fund Managers Limited asks you to. You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify us. We will not be responsible for any loss or damage you suffer as a result of circumstances beyond our reasonable control. We do not guarantee the performance or profitability of shares held within your investment. We will not accept any liability for any default, fraud or negligence by any approved bank that holds cash on your behalf. Investor Services Team: 0808 100 8808 11
ISA Terms & Conditions What is an ISA? An ISA is a savings scheme set up by the government offering tax relief for investors. Can I take out an ISA? Yes, if you are aged 18 or over and: you are resident or ordinarily resident in the UK (as defined by HM Revenue & Customs); or you do not normally live in the UK but you are carrying out duties which, by section 1 32(4)(a) of the Income and Taxes Act (Crown employees serving overseas), are treated as living in the UK for tax purposes, or you are married to a person who carries out such duties. If you are in any doubt about your status as a UK resident, you should contact your authorised professional adviser or local tax office. The current ISA investment limits will apply to your ISA (see page 2 for more detail). You are allowed to invest in only one stocks and shares ISA in any single tax year. HM Revenue & Customs checks each year to make sure that this regulation is not broken and will tell us if an ISA should be labelled as void. Choice of funds and types of shares Funds, including investment risks associated with them, are referred to earlier in this document. You should read and understand all the relevant information before deciding whether you want to invest. You can hold accumulation shares in all our funds. There are details of funds that offer income shares in appendix 1. If you are not sure whether an investment is right for you, you should get independent financial advice. You may have to pay for this advice. Can I transfer an ISA? Yes, you can transfer your ISAs between different managers. To transfer an ISA to us, you should contact your authorised professional adviser or fill in the ISA transfer form included with this document. To transfer our ISA to another manager, you should contact your authorised professional adviser or the new manager you want to transfer your investment to and they will give you the relevant transfer form. If you transfer an ISA to us from another manager, we will invest the proceeds we receive from them in line with your instructions. If you want to transfer your ISA to another manager, we will cash in your investment and transfer the proceeds to the new manager. How do I invest in an ISA? Before we can open an ISA for you, we must have your ISA application form and payment in full. If you want to make regular monthly investments, you must also fill in the direct debit authority on your application form. Any ISA we open for you will be governed by these terms and conditions. If you are making a lump sum investment, you should make your cheque or banker's draft payable to Old Mutual Fund Managers Limited. If you are paying each month, you must pay by direct debit. If your cheque did not clear, or if your direct debit is not paid, we may cancel your application and any transactions up to that point. You agree to cover us against any direct or indirect losses, costs and expenses that arise as a result of your investment and later cancellation. How do I know that you have invested my money? We keep an account for you that shows the funds and the number of shares you hold. We will buy shares for your account at the next 12:00 noon valuation point after receiving your investment. We collect regular monthly ISA investments by direct debit on the 1st of each month (or on the next business day). We allocate shares to your account on the basis described in the earlier section called 'How do I invest?' on page 5. We acknowledge lump sum investments by sending a contract note to you and your authorised professional adviser by 5:00pm on the next business day after we bought your shares. 12 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR
For a regular monthly investment by direct debit, we acknowledge your initial application by writing to you and your authorised professional adviser. We will send a contract note to acknowledge any further lump sum investments to the account. Registration of shares All shares will be registered jointly in our name and yours, and we will hold them on your behalf. Although you own your account, you cannot use it as security for any loan. We cannot record any other person's interest in your account. How do I close my ISA? You must tell us in writing if you want to close your ISA. We normally issue a cheque to settle the account on the fourth business day after we receive your instructions. If you prefer, you can phone us and we will send you a contract note and a renunciation form. You should fill in the renunciation form and return it to us. We will then send you a cheque within four business days of receiving your form. We can close your account, after giving you notice in writing, under certain circumstances allowed for in the ISA regulations. These circumstances could include us deciding that it would not be practical to continue with your ISA, or you breaking any of these terms and conditions. What happens if the ISA becomes void? If at any time you tell us about, or we become aware of, any failure by you to follow the regulations, we will tell you in writing that your ISA investment has, or will, become void (in other words, no longer valid under the ISA regulations). What if my personal details change? You must tell us in writing immediately if: your permanent home address changes; or you no longer qualify on 'residential' grounds, according to the current definition by HM Revenue & Customs. If you are not sure whether you need to tell us about a change, you should contact your authorised professional adviser or our Investor Services Team. Further information The terms and conditions apply to you and you cannot transfer or assign them to another party. We may choose an associate to replace us as the authorised corporate director under this agreement and transfer all duties and responsibilities under this agreement to them. (We will give you notice of this, if it is reasonably practical to do so.) We may employ agents to advise on or perform any of our responsibilities under these terms and conditions. We will only do this if we are satisfied that these agents are competent to carry out those functions and responsibilities. We will write to tell you beforehand about any such a change if we need to do so. As far as we know, this information is correct at the time of printing. Please note that minimum investment levels, charges and other terms and conditions mentioned in this document can change. Depending on your circumstances, we may have to sell your investment and you could lose the tax advantages normally associated with ISAs. Investor Services Team: 0808 100 8808 13
Appendix 1: key data table Note: annual management charge is taken from income unless stated otherwise. Class A (retail) shares Initial charge TER 2 Annual management charge Other annual expenses Annual accounting date Distribution payment dates Old Mutual Asian Select Fund 4.00% 1.83% 1.50% 0.33% 31 Oct 31 Dec Old Mutual Corporate Bond Fund 3.50% 1.23% 1.10% 0.13% 31 Jul 31 Mar, 30 Jun 30 Sep, 31 Dec Old Mutual Dynamic Bond Fund 3.50% 1.44% 1.25% 0.19% 31 Jul last day of each month Old Mutual Equity Income Fund 4.00% 1.74% 1.50% 0.24% 31 Jul 31 Mar, 30 Jun (Annual management charge is taken from capital) 30 Sep, 31 Dec Old Mutual European Equity Fund 4.00% 1.75% 1.50% 0.25% 31 Oct 31 Dec Old Mutual Extra Income Fund* 4.00% 1.77% 1.50% 0.27% 31 Jul 31 Mar, 30 Jun (Annual management charge is taken from capital) 30 Sep, 31 Dec Old Mutual Global Equity Fund 4.00% 1.83% 1.50% 0.33% 31 Oct 31 Dec Old Mutual Global Strategic Bond Fund 3.50% 1.12% 1.00% 0.12% 31 Oct 31 Mar, 30 Jun 30 Sep, 31 Dec Old Mutual Japanese Select Fund 4.00% 1.75% 1.50% 0.25% 31 Oct 31 Dec Old Mutual North American Equity Fund 4.00% 1.71% 1.50% 0.21% 31 Oct 31 Dec Old Mutual Select Managed Fund 1 4.00% 1.67% 0.75% 0.19% 30 Apr 31 Mar, 30 Jun 30 Sep, 31 Dec Old Mutual UK Select Equity Fund 4.00% 1.69% 1.50% 0.19% 31 Oct 31 Dec Old Mutual UK Select Mid Cap Fund 4.00% 1.67% 1.50% 0.17% 31 Jul 30 Sep Old Mutual UK Select Smaller Companies Fund 4.00% 1.93% 1.75% 0.18% 31 Jul 30 Sep 1 The underlying funds into which the fund invests will also be subject to an annual management charge. This charge will be partially rebated to ensure that the total effective management charge borne by shareholders of class A shares will not exceed 1.25%, and that the total effective management charge borne by shareholders of both class B and C shares will not exceed 0.75%. 2 TER (total expense ratio): this is a measure of the total costs associated with managing the fund. The TER shows the annual operating expenses of the fund but it does not include the initial charge (which is shown separately) or transaction expenses (the costs of dealing in the underlying assets in the fund, which vary according to how often the fund manager buys and sells the underlying assets and the size of the transactions). The total costs of the fund are divided by the total assets to give a percentage. The TER is accepted internationally as the way of comparing these costs. These figures are worked out as at 31 December 2010 using information from the last audited report and accounts for each fund. TERs from previous periods are available from our Investor Services Team. 3 PTR (portfolio turnover rate): the portfolio turnover rate is a figure which indicates the rate at which the manager of the fund turns over the value of the portfolio (that is, buys and sells underlying assets in the fund). If the portfolio turnover rate is high, the costs related to buying and selling the underlying assets may cause a greater reduction in fund performance. At the same time, the increased activity by the fund manager may mean that changing investments increases the performance of the fund enough to outweigh these costs. These figures have been worked out as at 31 December 2010, using this formula: (Purchase of securities + Sale of securities) (Subscription of shares + Redemption of shares) average fund value over 12 months x 100 14 Old Mutual Fund Managers Limited, FREEPOST RRYH-XTSY-HEZH, PO Box 10278, Chelmsford CM99 2AR