Change to the Scottish Equitable Schroder Absolute Return Bond fund

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For customers

We’ve made a change to the fund objective of the Scottish Equitable Schroder Absolute Return Bond fund. This change was effective from 31 December 2017.

Why has this change been made?

Schroder, the underlying fund manager of the Scottish Equitable Schroder Absolute Return Bondfund, has chosen to amend the underlying fund objective to give more clarity on what the fund aims to do. In line with these changes, we are updating the fund objective of the Scottish Equitable Schroder Absolute Return Bond fund to ensure consistency with the underlying fund.

Nothing else about the fund has changed; the way the fund is managed, the fund managers, the Aegon risk ratings and charges have remained the same.

The change will be implemented gradually across our material, so you may notice both the old and new fund objectives in use for a time.

The change in more detail

The underlying Schroder fund had previously aimed to achieve a positive total return (income plus capital growth) over a 12-month rolling period. The fund now aims to achieve an absolute return of 3 month London Interbank Offer Rate plus 2% (before charges) over rolling 12-month periods.

Absolute return funds aim to achieve positive returns in all market conditions, typically over rolling one-year periods. There's no guarantee that either the target or absolute return will be achieved. The Scottish Equitable version of the fund has higher charges than the underlying Schroder fund and will, therefore, be less likely to meet this target. The value of this investment can go down as well as up and investors may get back less than they invested.

The change to the fund objective is detailed in the table below:

Scottish Equitable Schroder Absolute Return Bond fund
Scottish Equitable Schroder Absolute Return Bond fund
Fund objective before 31 December 2017 Fund objective after 31 December 2017
This fund aims to achieve a positive total return (income plus capital growth) over a 12- month rolling period, by investing mainly in bonds and other fixed- and floating-rate securities of various currency denominations issued by governments, government agencies, supra-national and corporate issuers worldwide. This fund aims to achieve an absolute return of 3 month LIBOR (London Inter-bank Offer Rate) plus 2% before charges over a 12- month rolling period, by investing mainly in bonds and other fixed- and floating-rate securities of various currency denominations issued by governments, government agencies and corporate issuers worldwide. There's no guarantee that either the target or absolute return will be achieved. The Scottish Equitable fund has higher charges than the underlying Schroder fund and will, therefore, be less likely to meet this target.

 What do investors need to do?

Existing investors don’t need to do anything. However, if existing investors feel the fund is no longer suitable they should speak to a financial adviser in the first instance. You can find one in your area at unbiased.co.uk.

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