On 25 March 2021, we closed the Scottish Equitable Absolute Insight Emerging Market Debt fund, available as part of our insured pension and Aegon Retirement Choices (ARC) fund ranges.
When the fund closed, we moved remaining investors into the Scottish Equitable Baillie Gifford Diversified Growth fund.
When this happened:
- the Total Charge* for pension investors decreased from 1.97% to 1.68%.
- The Fund Charge** for ARC investors decreased from 0.97% to 0.68%.
*This includes a standard 1% product charge, a fixed management fee and expenses that vary with the day to day costs of running the fund. Investors may pay a different product charge.
** This is on top of any product or adviser charge and includes a fixed management fee, plus expenses that vary with the day to day costs of running the fund.
Normally we prefer to give investors at least 60 days’ notice of such a change, but due to the nature of this change this has not been possible.
Why we closed the fund
The underlying fund manager, Insight Investment Management (Global) Limited, decided to close the underlying fund on 1 April 2021. In preparation for this, on 25 March 2021, we closed the Scottish Equitable version of the fund and moved existing investors into the Scottish Equitable Baillie Gifford Diversified Growth fund.
More about the Scottish Equitable Baillie Gifford Diversified Growth fund
We selected the Scottish Equitable Baillie Gifford Diversified Growth fund as we believe it to be the most comparable fund available within our range, in terms of what it invests in and what it aims to do. However, the fund is multi-asset rather than solely fixed interest focused.
The fund also has the long-term aim of exceeding cash rates rather than being an absolute return fund.
The fund aims to outperform the UK base rate by at least 3.5% a year (after charges) over rolling five-year periods with an annual volatility under normal circumstances of less than 10%. The fund can invest in a wide range of different asset classes including, but not limited to, equities (shares), government and corporate bonds, emerging market debt, property, forestry, commodities, infrastructure, insurance-linked bonds and absolute return funds. There's no guarantee that either the target or positive returns will be achieved. The Scottish Equitable fund has higher charges and will therefore be less likely to meet this target.
For more information on the alternative fund, you can view the fund factsheet via the ‘Fund prices and performance’ page and viewing either ‘Other fund ranges’ or ‘Aegon Retirement Choices (ARC)’.
There’s no guarantee the fund will meet its objectives. The value of an investment can fall as well as rise and isn’t guaranteed. Investors could get back less than they originally invested.
What current investors need to do
If current investors are happy for their investment to remain in the Scottish Equitable Baillie Gifford Diversified Growth fund, then they don’t need to do anything. However, if investors feel that this fund isn’t suitable for them, they can switch their investment and redirect any future investment, free of any switch charge, into an alternative fund or funds of their choice.
If investors wish to do this, they should complete an alteration of fund choice form and return it to us as soon as possible.
If you would like more information, please speak to a financial adviser. If you don’t have one you can find one in your area at moneyadviceservice.org.uk