Closure of the Scottish Equitable Threadneedle Absolute Return Bond fund

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On 18 July 2019, we’re closing the Scottish Equitable Threadneedle Absolute Return Bond fund across our pension and Aegon Retirement Choices (ARC) fund ranges.

When the fund closes, we’ll move remaining investors into the Scottish Equitable Janus Henderson UK Absolute Return fund, unless they tell us to move it elsewhere before then.

We’ll be writing to all those affected to let them know about the closure. Due to the circumstances behind this fund closure, in this case it’s not been possible to give our standard notice period of 60 days. We apologise for any inconvenience this may cause.

Why we’re closing the fund

The underlying fund manager, Columbia Threadneedle Investments, has taken the decision to close the underlying Threadneedle Absolute Return Bond fund. In line with this decision, we’re closing the Scottish Equitable version of this fund on 18 July 2019.

What this means for investors

Investors can stay invested and continue to pay in any regular contributions until the fund closes.

Then, on 18 July 2019, we’ll automatically switch their existing investment in the Scottish Equitable Threadneedle Absolute Return Bond fund, and all future contributions, into the Scottish Equitable Janus Henderson UK Absolute Return fund, free of any switch charges. When this happens:

  • The Fund Charge* for ARC investors will increase from 0.65% to 0.95%.
  • The Total Fund Charge† for pension investors will increase from 1.65% to 1.95%.

* 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 Janus Henderson UK Absolute Return fund

We’ve selected the Scottish Equitable Janus Henderson UK Absolute Return fund as we believe it to be the most comparable fund available within our fund range in terms of what it aims to do.

This fund aims to achieve a positive absolute return over the long term whether markets go up or down by investing mainly in UK company shares. The fund also has the ability to invest up to 40% in assets based outside of the UK. Derivatives will be used to help it achieve its objective. It aims to typically deliver absolute (more than zero) returns in each year, although this is not guaranteed. There’s no guarantee that either the target or positive returns will be achieved. The Scottish Equitable version of this fund has higher charges than the underlying fund and will therefore be less likely to meet its objective. The additional charges/expenses for this fund include a performance fee that will rise and fall depending on performance day to day – so the charge you pay may vary significantly from the total charge quoted below, which is based on recent past performance.

For more information on the alternative fund you can view the fund factsheet via the ‘Fund prices and performance’ page and viewing ‘Other fund ranges’ for pension investors or ‘Aegon Retirement Choices (ARC)’ for ARC investors.

There’s no guarantee the fund will meet its objectives. The value of an investment can fall as well as rise and is not guaranteed. You could get back less than you originally invested.

What current investors need to do

If current investors are happy for us to move their investment into the Scottish Equitable Janus Henderson UK Absolute Return fund, 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 unbiased.co.uk.