Performance fees are paid to reward outperformance. They only apply when the manager has performed above an agreed benchmark or hurdle rate and so the payment of a performance fee is an indication of how successful the fund is.
A performance fee will rise and fall depending on the day to day performance of the fund - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
We regularly review the disclosable charges* to take account of current performance fees. We’ll communicate any changes through fund updates to make sure you’re kept as up to date as possible.
The value of an investment can fall as well as rise for a number of reasons, for example market and currency movements. You may get back less than originally invested.
- Absolute Return Select Portfolio
- Cautious Select Portfolio
- Scottish Equitable Absolute Insight Emerging Market Debt
- Scottish Equitable Absolute Insight UK Equity Market Neutral
- Scottish Equitable BlackRock UK Absolute Alpha
- Scottish Equitable Cazenove UK Absolute Target
- Scottish Equitable Fulcrum Alternative Beta Plus Daily
- Scottish Equitable Henderson UK Absolute Return
- Scottish Equitable GLG UK Select
- Scottish Equitable Sarasin EquiSar IIID
Absolute Return Select Portfolio
This fund contains a number of underlying funds where a performance fee applies. Currently, these are:
- the Scottish Equitable BlackRock UK Absolute Alpha fund
- the Scottish Equitable Absolute Insight UK Equity Market Neutral fund
- the Scottish Equitable Absolute Insight Emerging Markets Debt
- the Scottish Equitable Cazenove UK Absolute Target fund
- the Scottish Equitable Sarasin EquiSar IIID fund, and
- the Scottish Equitable Fulcrum Alternative Beta Plus Daily
This means the additional charges/expenses** for the Absolute Return Select Portfolio and the Cautious Select Portfolio will rise and fall depending on performance day to day – so the charge you pay may vary significantly from the figure quoted in our factsheets and other literature, which is based on recent past performance.
In the case of the Cautious and Absolute Return Select Portfolios, the performance fees for all funds in the portfolio to which a performance fee applies will be added together to calculate the total fee payable.
Details of how the performance fee is calculated for each of the underlying funds named above can be found below.
Cautious Select Portfolio
See ‘Absolute Return Select Portfolio’
Scottish Equitable Absolute Insight Emerging Market Debt fund
Insight may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Absolute Insight Emerging Market Debt fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 10% of any growth above its target growth rate† and only when the price is higher than when a performance fee was last paid. For each day when performance is positive, an accrual is made, and on each day when it's negative, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each calendar year, any accrued performance fee will be taken from the fund and paid to Insight, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charges*.
† The target growth rate is Sterling 3-month LIBID.
Scottish Equitable Absolute Insight UK Equity Market Neutral fund
Insight may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Absolute Insight UK Equity Market Neutral fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 10% of any growth above its target growth rate† and only when the price is higher than it was when a performance fee was last paid. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each year any accrued performance fee will be taken from the fund and paid to Insight, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge*.
†The target growth rate is Sterling 3-month LIBID.
Scottish Equitable BlackRock UK Absolute Alpha
BlackRock may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable BlackRock UK Absolute Alpha fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 20% of any growth above its target growth rate† and only when the price is higher than it was when a performance fee was last paid. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each calendar quarter any accrued performance fee will be taken from the fund and paid to BlackRock, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge*.
†The target growth rate is Sterling 3-month LIBOR at the last quarter end.
Scottish Equitable Cazenove UK Absolute Target fund
Cazenove may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Cazenove UK Absolute Target fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 20% of any growth above the price when a performance fee was last paid. For each day when performance is positive, an accrual is made, and on each day when it's negative, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of an annual period coinciding with the fund’s accounting period, any accrued performance fee will be taken from the fund and paid to Cazenove, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charges*.
Scottish Equitable Fulcrum Alternative Beta Plus Daily fund
Fulcrum may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Fulcrum Alternative Beta Plus Daily fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 10% of any growth above the price when a performance fee was last paid. For each day when performance is positive, an accrual is made, and on each day when it's negative, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each year any accrued performance fee will be taken from the fund and paid to Fulcrum, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge*.
Scottish Equitable Henderson UK Absolute Return fund^
Henderson may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Henderson UK Absolute Return fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, and only when the price is higher than it was when a performance fee was last paid, an accrual is made, and on each day when it’s below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each three months (ending February, May, August and November) any accrued performance fee will be taken from the fund and paid to Henderson, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can’t determine the specific charges payable in advance – they could be significantly more than the disclosed charge*.
^ Formerly, the Scottish Equitable Gartmore UK Absolute Return fund
†The target growth rate is the UK Base Rate.
Scottish Equitable GLG UK Select fund
GLG may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable GLG UK Select fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each six-month period, any accrued performance fee will be taken from the fund and paid to GLG, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge*.
†The target growth rate is the FTSE All-Share Total Return Index.
Scottish Equitable Sarasin EquiSar IIID fund
Sarasin may be entitled to a performance fee in addition to the annual management charge***. This means the additional charges/expenses** for the Scottish Equitable Sarasin EquiSar IIID fund will rise and fall depending on the performance day to day - so the charge you pay may vary significantly from the figure quoted on the individual fund factsheet and other fund literature, which is based on recent past performance.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each year, any accrued performance fee will be taken from the fund and paid to Sarasin, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance - they could be significantly more than the disclosed charge*.
†The target growth rate is the Retail Price Index +3.5%
* Disclosable charge(s) or disclosed charges or disclosable yearly charges/ expenses
This is an indication of the actual charges applying to a fund as part of the management process. The charges listed are the 'additional' charges, in other words those charges above the usual charges that apply to all funds.
** Additional yearly charges/expenses or additional charges
Some funds may have additional disclosable yearly charges or fund expenses, on top of the annual management charge (AMC). The additional charges/expenses disclosed are estimated. Although the majority is made up of an agreed management fee, the expenses element depends on the actual expenses incurred by the underlying funds, so what you actually pay may vary slightly.
*** Annual Management Charge (AMC)
The yearly charge for administering your plan/fund that is typically applied daily.
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