Closure of the Scottish Equitable Fulcrum Diversified Alternative Beta Plus Daily fund
On 26 March 2019, we’re closing the Scottish Equitable Fulcrum Diversified Alternative Beta Plus Daily fund. When the fund closes, we’ll move remaining investors into the Scottish Equitable Baillie Gifford Diversified Growth fund, unless they tell us to move their investment elsewhere before then.
We’ll be writing to all those affected by these changes in advance to let them know about the closure, which applies across our pension and Aegon Retirement Choices (ARC) fund ranges.
Why we’re closing the fund
We constantly monitor and refine our fund ranges. The Scottish Equitable Fulcrum Diversified Alternative Beta Plus Daily fund hasn’t grown as we’d expected, which means it’s too small to be economically viable. As a result, we’ve decided to close the fund.
What this means for investors
Investors can stay invested and continue to pay in any regular contributions as normal until the fund closes. Then, on 26 March 2019, we’ll automatically switch their existing investment in the Scottish Equitable Fulcrum Diversified Alternative Beta Plus Daily fund, and all future contributions, into the Scottish Equitable Baillie Gifford Diversified Growth fund, free of any switch charges.
The Fund Charge† for ARC investors will reduce from 1.15% to 0.75%, and for pension investors in our older products, the Total Fund Charge* will reduce from 2.15% to 1.75%.
† This is on top of any product or adviser charge you pay and includes a fixed management fee plus expenses that vary with the day to day costs of running the fund. The fund charges may differ for Retiready (RR) or Aegon One Retirement (AOR).
*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. You may pay a different product charge.
More about the Scottish Equitable Baillie Gifford Diversified Growth fund
We’ve carefully selected the Scottish Equitable Baillie Gifford Diversified Growth fund as an alternative fund as we believe it to be the most comparable fund available within our fund range in terms of what it aims to do.
The underlying Baillie Gifford fund aims to outperform the UK base rate by at least 3.5% a year (after fees) over rolling five-year periods with an annual volatility under normal circumstances of less than 10%. The fund may invest in a broad range of asset classes including equities (shares), investment grade and high yield bonds, property, private equity, infrastructure, commodities and currencies. Up to 100% of the fund may be invested in collective investment vehicles and it may use derivatives for either investment or hedging purposes. 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.
There is no guarantee the fund will meet its objective. The value of an investment can fall as well as rise and investors could get back less than they originally invested.
What current investors need to do?
If current investors are happy to be invested 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 a switch form and return it to us before 26 March 2019.
If you would like more information, please speak to your financial adviser. If you don’t have one, you can find one in your area at unbiased.co.uk