Changes to the North American fund

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From 25 October 2016, the North American fund will change from being actively managed by Kames Capital to being passively managed by BlackRock. As a result of these changes, the fund description and benchmark will change. This affects the pension fund only, available through our ARC platform and our older pension products. The life and Aegon Ireland funds are not affected.

Why we’re making these changes

As part of our Funds Promise, we constantly review the funds in our range to ensure they perform as expected in order to meet the needs of our customers.

We believe a passively managed approach to North American equities will improve the fund’s ability to meet its objective of performing broadly in line with the North American equity market.

As a result, the fund will now invest directly into the passively managed North American Equity Tracker(Opens new window) fund managed by BlackRock, although the fund name will remain North American.

How will this affect investors?

The fund description and benchmark will change to reflect the new way the fund will be managed from 25 October 2016. The fund name and Aegon risk rating will remain the same. In addition, the fund charge for ARC pension planholders will reduce from 0.30% to 0.08%. This charge is on top of any product and adviser charges.

For our older pension products the additional fund related charge/expenses will stay the same, at 0.0%.

This fund will now be passively managed, meaning the fund manager will aim to match the performance of a benchmark index by investing in the same, or highly comparable, assets in the same proportions as that index. Details of these changes are outlined in the following table:

Benchmark before 25 October 2016 Benchmark from 25 October 2016
S&P 500 TR Index FTSE Custom North America Net Midday Index
Fund objective before 25 October 2016 Fund objective from 25 October 2016
This fund aims to perform broadly in line with the S&P 500 TR index, net of fees, by investing mainly in US equities (company shares) with scope to invest in Canadian equities. This fund is passively managed by BlackRock and aims to achieve capital growth by closely tracking the performance of FTSE Custom North America Net Midday Index by investing in companies in that index. The fund will invest directly into constituent companies and via other transferable securities that give exposure to companies in the index.

What do current investors need to do?

Existing investors don’t need to do anything, the fund will change automatically. We’ve written to them to tell them about these changes and to give them the option to transfer into another fund of their choice, free of any switch charges, if they want to.

There’s no guarantee that the fund’s objectives will be met. The value of this investment can go down as well as up and investors may get back less than they invested.