Closure of the Scottish Equitable UBS Targeted Return fund

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On 27 August 2019, we’re closing the Scottish Equitable UBS Targeted Return fund across our pension, life and Aegon Retirement Choices (ARC) fund ranges.

When the fund closes, we’ll move remaining investors into the Balanced Passive fund, unless they tell us to move it elsewhere before then.

Normally we prefer to give investors at least 60 days’ notice of such a change. However, due to the nature of these changes, in this case it has not been possible to give our standard notice period. We apologise for any inconvenience this may cause.

Why we’re closing the fund

On 12 September 2019, UBS Asset Management, the fund manager, is closing the underlying fund.

Therefore, in preparation for this, we’re closing the Scottish Equitable version of the fund and moving existing investors into the Balanced Passive fund.

What this means for investors

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

Then, on 27 August 2019, we’ll automatically switch their existing investment in the Scottish Equitable UBS Targeted Return fund, and all future contributions, into the Balanced Passive fund, free of any switch charges. When this happens:

  • The Fund Charge† for ARC investors will reduce from 0.70% to 0.11%.
  • The Total Fund Charge* for pension and life investors will reduce from 1.70% to 1.02%.

† 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 Balanced Passive fund

We’ve selected the Balanced Passive fund as an alternative because we believe it has favourable risk/return characteristics, is diversified across a number of asset types and has a lower charge.

However, it should be noted that the Balanced Passive fund differs from the Scottish Equitable UBS Targeted Return fund in the following ways:

  • It’s passively managed rather than actively managed. Passively managed funds aim to match the performance of a benchmark by investing in the same, or comparable assets in the same proportions. Actively managed funds use a fund manager who will use analytical research, forecasts and their own judgement to make decisions on where to invest.
  • It sits within a different Association of British Insurers (ABI) sector – the Balanced Passive fund sits in the ABI Mixed Investment 40-85% Shares sector, whereas the Scottish Equitable UBS Targeted Return fund sits in the ABI Specialist sector.
  • It’s benchmarked against its ABI sector average rather than an index – the Balanced Passive fund is benchmarked against the ABI Mixed Investment 40-80% Shares sector average whereas the Scottish Equitable UBS Targeted Return fund is benchmarked against the UK Retail Price index.
  • Unlike the Scottish Equitable UBS Targeted Return fund, the Balanced Passive fund isn’t an ‘absolute return’ fund. An absolute return fund aims to achieve positive returns in all market conditions, typically over rolling one-year periods.

Balanced Passive fund objective

This fund aims to achieve long-term capital growth by investing mainly in UK and overseas equities (shares of companies). The remainder is invested in fixed interest investments (bonds) and cash. The fund is passively managed, so it aims to broadly match the performance of the Association of British Insurers (ABI) Mixed Investment 40-85% Shares sector average. The fund’s performance may not always precisely track the average. For example, when market conditions offer particularly strong opportunities to actively managed funds, the fund’s returns may be lower than the sector average.

Find out more

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 Balanced Passive 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.