FUNDS KEY FEATURES. This is an important document. Please keep it safe for future reference. LEGAL & GENERAL SELECT PORTFOLIO BOND

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1 LEGAL & GENERAL SELECT PORTFOLIO BOND (financial solutions/network) FUNDS KEY FEATURES. This is an important document. Please keep it safe for future reference. INSURANCE. SAVINGS. INVESTMENT MANAGEMENT.

2 2 SelECT PoRTfolio Bond FUNDS KEY FEATURES what are the funds key features? This document is part of the information we provide to help you decide whether our Select Portfolio Bond is right for you. The accompanying Key Features explains the basics of the bond itself, this Funds key features provides important information about the funds available and how they work with the bond. It also lists the funds in risk order with key information to help you compare them. You should read this document carefully and keep it safe together with the Key Features and your Illustration. All information provided is as accurate and current as we can make it. However, we can t guarantee that the information for any individual fund hasn t changed since this document was published in August USING THE FUNDS KEY FEATURES. We aim to use language that s easy to understand. Sometimes, however, because of the way investments work and the words some investment fund managers use to describe their funds, we ve no choice but to use technical terms. Wherever possible, we ve tried to explain each point in full. You ll already be familiar with some of the terms used in this document having read the Key Features, but some may be new to you. If you re unclear about anything at all, your adviser will be happy to answer any questions you have. FINDING OUT MORE For more information on investing and investment types please refer to your Investment Advice document. If you need more detailed information about any particular fund, your adviser will be able to help.

3 SelECT PoRTfolio Bond FUNDS KEY FEATURES 3 CONTENTS QUESTIONS AND ANSWERS WhAT is an investment fund? WhAT happens when I invest in an external fund? HOW IS MY INVESTMENT VALUED? WhAT is an authorised fund? FUNDS INTRODUCTION FUND specific risk definitions IMPORTANT FUND INFORMATION FUND RISK RATINGS AND THEIR DEFINITIONS THE RISK METER FUND INFORMATION RISK rating 2 RISK rating 3 RISK rating 4 RISK rating 5 INVESTMENT MANAGEMENT COMPANIES

4 4 SelECT PoRTfolio Bond FUNDS KEY FEATURES QUESTIONS AND ANSWERS. WHAT IS AN INVESTMENT FUND? When you invest in the bond, we put your money into one or more funds. Each fund is divided into a number of units. When you invest we buy you some of these units. It s the rise and fall in the price of these units that determines the value of your investment. The bond offers 34 funds managed by 14 different investment management companies. We manage some of the funds. Other investment management companies manage the rest. We refer to the funds that aren t managed by us as external funds elsewhere in this document. WHAT HAPPENS WHEN I INVEST IN AN EXTERNAL FUND? When you invest in an external fund, we buy you units in a Legal & General fund that invests in the corresponding authorised fund. Authorised funds are explained in the What is an authorised fund? section on the following page. For more information about external funds, please see the Product Guide. NOTES You don t hold units directly in the authorised fund. We don t have any influence over how external fund managers manage their funds. HOW IS MY INVESTMENT VALUED? It s the unit price that determines how many units you buy and how much they re worth when you sell them. Internal funds Each day, when we calculate the unit price, we take account of the amount of money going in and out of the fund. We use the general principle that if investments into the fund are greater than withdrawals, we need to buy assets. The unit price then takes account of the prices at which assets in the fund might be bought and the costs of dealing in those assets. If withdrawals from the fund are greater than investments, we need to sell assets. The unit price then takes account of the prices assets might be sold for, together with the sale costs. Selling prices are generally lower than buying prices.

5 Select Portfolio Bond FUNDS KEY FEATURES 5 The difference between the values determined by each method of calculation is known as the valuation spread. The amount of the valuation spread usually depends upon the assets the fund invests in. For instance, the cost of dealing in the underlying assets will vary by asset type, country and company size. Funds that invest in commercial property, certain corporate bonds, smaller companies or emerging markets tend to have a larger difference. A significant change in the amount of money going into or out of the fund on a particular day may lead to a change in the method of calculation for that day s valuation. This could result in a significant change in the unit price. The current spreads applicable to the funds we manage are included in the Fund information section starting on page 15. Further details about how we value funds and calculate unit prices are contained in our A guide to how we manage our unit-linked funds, which is available on request from your adviser. External funds When calculating the unit price for Legal & General s version of the fund, we use the price supplied by the external fund manager. We have no control over the method of calculation they use. External fund managers sometimes adjust the valuation of their fund to cover exceptional costs that may arise when people buy or sell units in their authorised fund. We can t predict when an external fund manager will make such a charge. If and when it happens, we make a deduction when calculating the unit price. Your adviser can provide you with details of how an external fund manager calculates the prices for a particular authorised fund. Further details about managing and valuing external funds are contained in the Product Guide. WHAT IS AN AUTHORISED FUND? There are two types of authorised funds: A unit trust. An Investment Company with Variable Capital, more commonly known as an Open-Ended Investment Company (OEIC). Unit trusts The fund manager sets up a trust and appoints an independent financial institution such as a bank to act as the trustee. The trustee is entrusted to look after the assets that the fund invests in and to monitor the fund manager, on behalf of the beneficiaries. The beneficiaries of a unit trust are the people who invest in it. OEICs An OEIC is like a company. The fund manager is usually the director of the company and investors receive shares in the company. An OEIC has an independent depositary, usually a financial institution like a bank, who is entrusted with the safekeeping of the assets that the fund invests in. A depositary is similar to the trustee of a unit trust. OEICs usually offer a number of investment choices by using sub funds which have different investment aims. An OEIC is not a company in the traditional sense but simply an arrangement for investment. Because an OEIC has a number of sub funds, it may become necessary in exceptional circumstances for the liabilities of one sub fund to be met by all the other sub funds in the OEIC. While this could affect the performance of your fund, you d never be personally responsible for any debts of the OEIC and wouldn t be required to make any further payments after investing.

6 6 Select Portfolio Bond FUNDS KEY FEATURES FUNDS INTRODUCTION. WHO MANAGES THE FUNDS? An introduction to each investment management company and their funds available on the bond can be found in the Investment management companies section starting on page 24. ABOUT THE FUND INFORMATION For easy comparison, we ve put the funds into the order we ve rated their level of risk beginning with the lowest risk and ending with the highest risk. An explanation of how we rate the risks starts on page 11. The information provided for each fund is set out as shown in the example below. NOTES The company overviews are provided by the investment management companies themselves. As such, we cannot endorse or validate any of the information given. The information provided for each fund is as accurate and current as we can make it. For external funds we rely on the information provided by the company managing it. As such, we can t guarantee it s up to date. LEGAL & GENERAL EXAMPLE FUND Risk rating: 2 Natural income option available Fund aim: To achieve long-term capital growth. Fund charge: 0.20% (0.15% management charge, 0.05% additional expenses) Fund code: 0999 Fund specific risks: 12, 13, 20 Valuation spread: 0.03% Underlying fund type: Unit trust THE INFORMATION HEADINGS EXPLAINED We ve set out descriptions of all the headings that may be used and in the order they will appear. Not all information headings apply to all funds some have fewer depending on their characteristics. Natural income option available The fund allows natural income, as described in the Product Guide. Fund aim This is a general description of what the fund aims to achieve, as stated by the company managing the fund. There s no guarantee the fund manager will achieve the aim and it s not a statement of what will actually happen. It s important to consider that what you ll get back from a fund may not match your expectation, particularly in the short term. Fund specific risks In addition to the general risks of investing, as described in the Key Features, each fund carries some risks specific to the type of assets it invests in.

7 Select Portfolio Bond FUNDS KEY FEATURES 7 We make regular assessments of all the funds we offer and then decide which risks apply to each fund. Our assessment takes account of: the fund s aim, the assets the fund invests in, and the fund manager s own opinion of the risks that apply to their fund. To find out what the fund specific risk numbers applied to each fund mean please go to the Fund specific risk definitions section starting on page 8. For more information about fund specific risks, please see the Putting the fund specific risks into context section below. Fund charge The current fund charge applicable to the fund, as described in your Key Features. Fund code The code we use to identify the fund for administration purposes. You need to use this code when completing the Application Form. Valuation spread (internal funds only) This is the difference between the value of the units calculated assuming that more money is going into the fund than going out and the value based on more money going out of the fund than going in. These figures are based on the latest information we have available on 2 August The valuation spread may change from time to time. We can provide you with the spread applying to a fund at any time on request. Underlying fund type (external funds only) This tells you if the fund is invested in a unit trust or a sub fund of an OEIC, as explained in the What is an authorised fund? section on page 5. Risk rating This is the risk rating we ve given to the fund. NOTES The underlying fund type is not included for the funds we manage as they re not directly invested in unit trusts or OEICs. To find out about our risk ratings please see the Understanding the risks section on page 11. PUTTING THE FUND specific RISKS INTO CONTEXT Some funds have many fund specific risks. This doesn t necessarily mean that investing in that fund is riskier than choosing one with less fund specific risks. A fund often has more fund specific risks because it invests in a wider variety of assets. What s important is the percentage of the fund that s exposed to each risk. A significant exposure to one risk can lead to a fund rising and falling in value more than one with a low exposure to several risks. For example: Fund A invests 20% in overseas equities, 30% in UK equities and 50% in fixed interest securities. It has six fund specific risks. Fund B invests 100% in overseas equities. It only has three fund specific risks. Fund B has fewer fund specific risks but because all of your investment is exposed to the equities and exchange rate risks, it s likely to be a higher risk fund than Fund A, where your investment is divided between a spread of risks. Investing in a fund with a mix of assets can reduce the impact of each fund specific risk. Alternatively, you can create an investment portfolio that invests in a mix of funds.

8 8 Select Portfolio Bond FUNDS KEY FEATURES FUND SPECIFIC RISK DEFINITIONS. An explanation of the fund specific risks used in this Funds key features can be found below. You ll note that there are some numbers missing from the list. This is because we use standard descriptions for a number of different products and some of those numbers don t apply to the Select Portfolio Bond. To find out which risks apply to a fund you need to cross-reference the numbers in the fund specific risks section of the fund information with the corresponding numbered definitions. 12. Currency changes The fund may have investments valued in currencies that are not sterling (British pounds). If the value of these currencies falls compared to sterling, this may mean the value of your investment and the income paid to you will go down. If arrangements are made to protect the fund against currencies movements (known as hedging ) and the currencies rise compared to sterling, your fund will not benefit from those gains. 13. Equities (company shares) Investments in company shares tend to be riskier than for many other types of investment. This is because the value of shares goes up and down, more often and by a larger amount than for many other asset types, especially in the short term. 14. Fixed interest securities Investment returns on fixed interest securities - corporate and government bonds, and other types of debt - are particularly sensitive to trends in interest rate movements and inflation. Their values are likely to fall when interest rates rise. Such falls may be more pronounced in a low interest rate environment. Longer dated fixed interest securities will fall by more than short dated fixed interest securities. 15. Risk of issuer becoming less secure The financial strength of a company or government issuing a fixed interest security (such as a bond or other types of debt) determines their ability to make some or all of the payments they are committed to. If their financial strength weakens, the chances of them not making payments increases. 16. High-yield bonds The fund invests in higher yielding bonds (known as sub-investment grade bonds). Compared to lower yielding bonds (known as investment grade bonds) there is a greater risk that the fund will not receive back, either on time or at all, some or all of the amount invested or interest that is due to be paid. 17. Derivatives This fund uses derivatives for investment purposes and so may be higher risk than funds that don t. Sometimes, using derivatives could give lower returns, or cause the value of your fund to fall even though the market is rising. 18. Derivative counterparty risk The fund may have derivative contracts with companies such as banks or other financial institutions. If these companies experience financial difficulty, they may be unable to pay back some or all of the interest, original capital or other payments that they owe. If this happens, the value of your fund may fall. 19. Smaller companies The fund invests in smaller companies. Investments in smaller companies tend to be riskier than investments in larger companies because they can: be harder to buy and sell; go up and down in value more often, and by larger amounts, especially in the short term. 20. Concentration of investments Most funds have lots of individual investments, so don t rely upon the performance of just a few. The whole of this fund, or a large part of it, has relatively few individual investments. This means that a fall in the value of an individual investment can have a major impact on the overall performance of the fund. 21. Emerging markets The fund invests in countries where investment markets are not as well developed as those in the UK. This means that investments are generally riskier than those in the UK because they: are not as well regulated are more difficult to buy and sell have less reliable arrangements for the safekeeping of assets are more exposed to political and taxation uncertainties. The value of the fund can go up and down more often, and by larger amounts, than funds that invest in developed countries, especially in the short term. 22. Market sector Most of the fund invests in companies from a particular market sector. Investing like this can be riskier than investing across many market sectors. This is because the value of the fund can go up and down in value more often and by larger amounts than funds that are spread more widely, especially in the short term.

9 Select Portfolio Bond FUNDS KEY FEATURES Commercial property Property can be difficult to buy or sell. This could mean: cash builds up waiting to be invested, so the fund will underperform when property returns are greater than the interest earned; and/or property may have to be sold for less than expected. If an exceptional amount of withdrawals are requested, the fund manager may be forced to sell properties quickly. This could mean that properties are sold for less than expected, which would reduce the value of your investment. If the size of the fund falls significantly, the fund may have to invest in fewer properties. This may lead to an increase in risk. Rental growth is not guaranteed and unpaid rent could affect the performance of your investment. The value of property is generally a matter of valuer s opinion rather than fact and the true value of a property may not be recognised until the property is sold. 24. Deposit The fund has money on deposit with companies such as banks or other financial institutions. If any of these suffer financial difficulty, they may be unable to pay back some or all of the interest, original amount invested or other payments they owe. If this happens the value of your fund may fall. 25. Unregulated schemes This fund can invest in unregulated schemes. Each unregulated scheme can have a higher risk than an authorised scheme. This could lead to an increased risk to the value of your investment. 27. Socially Responsible or Religious Investments The standards used for this fund mean that it cannot invest in some companies shares or corporate bonds or in certain market sectors, for example tobacco or mining. Because this fund limits the companies it may invest in, it may be riskier than funds that don t have such restrictions. 28. Money market The fund invests in money market securities which may be issued by governments, companies, banks and other financial institutions. If any of these issuers suffer financial difficulty, they may be unable to pay back some or all of the interest, original amount invested or other payments they owe. The value of money market securities may fall due to changes in interest rates, inflation, creditworthiness, wider credit events or extensions to the anticipated term of investments. If this happens the value of your fund may fall. 29. Delayed repayment This fund is able to delay paying out, which may mean that you have to wait to get your money. A delay may happen when market conditions mean it is difficult for the fund manager to cash in investments to pay out to investors. For example, a fund with investments in commercial properties may find they may take time to sell. Whilst waiting to complete on the sale of properties, the fund manager may suspend making payments to investors who want to cash in. The fund can only delay paying out if it is in the interests of all investors and with the permission of the fund trustee or depositary. 30. Few bond issuers The fund invests almost exclusively in fixed interest bonds from a single or small number of issuers, such as companies or governments. If any of these issuers experience financial difficulty, they may be unable to pay back some or all of the interest, original investment or other payments that they owe. If this happens, the value of your fund may fall.

10 10 Select Portfolio Bond FUNDS KEY FEATURES 31. Liquidity This fund has investments that, rather than being traded on a stock exchange, are traded through agents, brokers or investment banks matching buyers and sellers. This makes the investments less easy to buy and sell than those that are traded on an exchange and on any particular day there may not be a buyer or a seller for the investments. In times of market uncertainty or if an exceptional amount of withdrawals are requested it may become less easy for your fund to sell investments. If this happens, the value of your fund may fall and in extreme circumstances this may also force a delay in buying and selling your investment in the fund. The fund can only delay paying out if it is in the interests of all investors and with the permission of the fund trustee or depositary. 32. Private equity This fund invests in shares of companies that are not listed on a stock exchange, so they can be difficult to buy or sell. This could mean the shares may have to be sold for less than expected, which would reduce the value of your investment. The value of private company shares is generally a matter of valuer s opinion rather than fact. 33. Exchange Traded Funds Exchange Traded Funds generally try to match the performance of a share index, such as the FTSE 100, or to track the price of commodities such as oil or gold. Exchange Traded Funds can use a number of different techniques to achieve their goals (including the use of derivatives) and as a consequence can be more complex than traditional funds. The value of this investment may go up and down more often and by larger amounts, particularly in the short term. 34. Targeted Absolute Return Funds The fund is a Targeted Absolute Return Fund. This type of fund tries to increase the value of your investment over a period of time, in both rising and falling markets. There is no guarantee of returns. The fund s value may go down as well as up. You may not get back the money you invested. Targeted Absolute Return Funds use a range of different types of investment strategies, some of which can be high risk, and may use derivatives. As a consequence these funds can be more complex than traditional funds. It is possible that the value of these funds could go down when the market is rising, or may not rise as quickly. Each Targeted Absolute Return Fund is designed to produce a specific outcome, so care should be taken when comparing them with other funds. 35. Stock lending The fund manager may lend stock to other parties and it is usual for the borrower to provide collateral. If the borrower fails to return the borrowed stock, the collateral may not be enough to cover the value of the stock, resulting in a reduction in the fund value. 36. Inflation linked bonds The fund invests in inflation-linked bonds, which are particularly sensitive to changes in inflation rates. Their values are likely to fall when inflation rates fall.

11 Select Portfolio Bond FUNDS KEY FEATURES 11 important fund information. understanding the risks Investing in a fund always means putting your money at some sort of risk. Your attitude to risk is key to choosing what fund, or mix of funds, is suitable for you. Your attitude to risk In the Investment Advice document you will find detailed information on our range of Customer Risk Profiles. We ve created these profiles to help you understand your attitude to investment risk. It is important that you refer to this information before you decide which funds to invest in. Select Portfolio Bond funds and their risk ratings Once you ve matched your attitude to risk to one of our Customer Risk Profiles, you ll be ready to take the next step and find the most suitable fund from the Select Portfolio Bond fund range available. How do we risk rate our funds? We organise our funds into five risk rating categories based on the risks we think they present to your money, and assume you will keep your investment for at least five years. It s important you understand that the risk rating of a fund may be significantly higher if you invest in a fund for a shorter time period. This means that, although there is no fixed term, you should always be prepared to keep your money invested for at least five years. Our opinion of fund risk ratings is based on how often a fund has fallen in value in the past and how big those falls have been. Our risk ratings aim to give you an idea of the potential for you to lose money over time. However, they cannot predict what actually will happen, or when. Future investment conditions might mean that you lose more than is currently suggested by the risk rating. To help make it clearer, we show our risk ratings on a scale from lowest risk to highest risk, risk rating 1 being the lowest and 5 the highest. We ve shown this scale on page 12, together with descriptions of the types of funds that you would expect to find in each fund risk rating category. You ll see that we ve divided each of the highest three categories into smaller sections. We have done this to try to make it easier for you to see which funds might match your own personal attitude to risk. However, we don t mean that each of our Customer Risk Profiles should match exactly with a corresponding Fund Risk Rating category. This is because it s important that you consider having a spread of investments and not limit yourself to one area. You may also have different goals for your various investments and may be investing over different time periods.

12 12 Select Portfolio Bond FUNDS KEY FEATURES fund risk ratings and their definitions. Fund risk rating categories are shown below and are on a scale from 1, being the lowest risk, to 5 being the highest risk. FUND RISK RATING CATEGORY ADDITIONAL RATING within CATEGORY definition of fund risk rating category 1 This category is risk free and so there are no funds in this category. 2 Funds in this category have risks that are similar to losing money when a financial institution fails. These funds are designed to operate like cash deposits by paying out the original investment plus the chance of potential returns, potentially at set maturity dates. They will not fall in value unless the charges taken by the fund manager are greater than the returns achieved, or one or more of the banks or financial institutions that hold your money fail to meet their obligations. 3 4 Lower Middle Upper Lower Middle Upper Funds in these categories hold investments that will go up and down in value. Funds may not hold all investment types and tend to focus on investments that do not typically change in value a lot from day-to-day. Funds may also invest in a range of investment types to try to limit the effect of one or more investment types performing poorly, but fund values could still fall significantly over time. Funds towards the middle and top of this category will hold investment types that have gone up or down more in value in the past than funds at the bottom. For example, this may be because those funds have invested in riskier investment types or they have focused on single investment types. Funds in these categories hold investments that are expected to go up and down in value from day-to-day. Funds are likely to invest in a range of investment types, including higher proportions of riskier investment types. Funds towards the middle and top of this category will hold investment types that have gone up and down more in value over the past 10 years than funds at the bottom. For example, this may be because those funds are designed to invest in areas or investment types that are more likely to experience larger changes in value than other investment types. 5 Lower Upper Funds in these categories may invest in either single investment types or a wide variety of investments that will go up and down in value a lot from day-to-day. Funds will tend to invest in less stable investment areas, for example certain overseas or emerging markets, where economic or political conditions create an extra degree of uncertainty.

13 Select Portfolio Bond FUNDS KEY FEATURES 13 The RISK Meter. When we show the risk rating of each individual fund on the scale, we call this our Risk Meter. As each fund has a place on the scale you can compare it easily to other funds. We review these risk ratings regularly and where recent movements in the value of a fund suggest it has become more risky, we move it up the scale. We are very unlikely to move funds down the scale because it s always possible that past movements in the value of a fund may be repeated in future. This risk meter is designed to give you a clearer picture of the level of the risk to capital associated with a particular fund. The meter can be used to see how different funds compare and where within a risk category they re placed. We classify our funds in terms of the risks we believe they present to your capital assuming that you were to hold your investment for at least five years. The five-year period is very important to our categorisation even investments that appear lower on the meter can demonstrate volatility in returns over short periods of time. Please note that the risk could be increased if you do not remain fully invested for at least five years. Although we ve classified the funds into five broad categories, you ll see from the illustrated meter that the funds in each category don t all have the same level of risk. There s a spectrum of risk. So, a fund near the top of one risk category may be closer in its risk profile to the higher category than to funds lower down in its own category. These ratings are based on our current view of the relative risks of each fund based on our experience. We may change our view of the amount of risk presented by certain types of investment over time. This could affect the risk categorisation of funds. Therefore, you should make sure that you review your situation regularly with your adviser to make sure the funds you ve selected are still suitable for you.

14 14 Select Portfolio Bond FUNDS KEY FEATURES THE RISK METER. Funds are shown below next to their risk rating and on a rising scale from 1 at the bottom of the risk meter, being the lowest risk, to 5 at the top being the highest risk. RISK RATING 5 Upper Lazard Emerging Markets Fund Lower Legal & General International Index Fund Schroder UK Mid 250 Fund RISK RATING 4 Legal & General Ethical Fund Upper Newton Global Income Fund M&G Global Dividend Fund Kames Ethical Equity Fund Old Mutual UK Alpha Fund Threadneedle Global Select Fund BNY Mellon Long Term Global Equity Fund Middle BlackRock UK Special Situations Fund Legal & General UK Equity Index Fund Threadneedle UK Equity Income Fund Newton Real Return Fund Legal & General UK Equity Income Fund Lower Legal & General Mixed Investment 40% 85% Fund Legal & General High Income Fund Kames High Yield Bond Fund Standard Life Global Absolute Return Strategies Fund Legal & General Property Fund M&G Global High Yield Bond Fund RISK RATING 3 Upper Henderson Preference and Bond Fund Legal & General Distribution (Growth) Fund Legal & General Distribution Fund Legal & General Managed Income Fund Investec Cautious Managed Fund Legal & General Mixed Investment 20% 60% Fund Middle Lower Legal & General All Stocks Index Linked Gilt Index Fund Legal & General Sterling Corporate Bond Index Fund Legal & General All Stocks Gilt Index Fund Fidelity Strategic Bond Fund Legal & General Sterling Income Fund Legal & General Mixed Investment 0% 35% Fund RISK RATING 2 Legal & General Cash Fund RISK RATING 1

15 Select Portfolio Bond FUNDS KEY FEATURES 15 FUND information. Please go to the Fund specific risk definitions section on page 8 to find out what the fund specific risk numbers applied to each fund mean. RISK rating 2. risk 2 fund Legal & general cash fund Risk rating: 2 Fund aim: To provide capital protection with growth at short term interest rates. The fund invests in the short-term money markets such as bank deposits and treasury bills. Notes A. The fund does not invest in any asset types where the capital value can fall, such as fixed interest securities. The value of the fund s assets would only fall if a deposit holder or the UK Government were unable to meet their obligations. B. If the interest earned by the fund s assets is insufficient to cover the fund charge, the unit price will fall. Fund charge: 0.21% (0.20% management charge, 0.01% additional expenses) Fund code: DAB5 Fund specific risks: 24 Valuation spread: 0.01%

16 16 Select Portfolio Bond FUNDS KEY FEATURES RISK rating 3. Please go to the Fund specific risk definitions section on page 8 to find out what the fund specific risk numbers applied to each fund mean. risk 3 funds Legal & GENERAl All StoCKS Gilt IndEX Fund Risk rating: 3 Lower Fund aim: To track the return of the FTSE Actuaries Government Securities All Stocks Index (after adjustment for charges and tax) by investing in UK Government Securities. In order to accurately track this index the fund will invest in a representative sample of holdings. Fund charge: 0.16% (0.12% management charge, 0.04% additional expenses) Fund code: DBY5 Fund specific risks: 14, 15, 20, 28, 29, 30, 31 Valuation spread: 0.12% Legal & GENERAl STERlING CoRPoRATE Bond IndEX Fund Risk rating: 3 Lower Fund aim: To track the return of the iboxx Sterling Non-Gilts ex-bbb Index (after adjustment for charges and tax) by investing in UK corporate bonds. In order to accurately track this index the fund will invest in a representative sample of holdings. Fund charge: 0.15% (0.11% management charge, 0.04% additional expenses) Fund code: DXK5 Fund specific risks: 12, 14, 15, 16, 29, 31 Valuation spread: 0.70% Legal & GENERAl MIXEd INVESTMENT 0% 35% Fund Risk rating: 3 Lower Fund aim: To deliver long term capital growth which exceeds the Bank of England s base interest rate as set by the Monetary Policy Committee or successor bodies. Fund charge: 0.50% (0.40% management charge, 0.10% additional expenses) Fund code: DPU5 Fund specific risks: 12, 13, 14, 15, 16, 29, 31, 33 Valuation spread: 0.43% Legal & GENERAl STERlING INCoME Fund Risk rating: 3 Middle Fund aim: To provide a high monthly income from a portfolio of predominantly investment grade bonds issued in the UK and overseas. The fund can invest up to 20% in sub-investment grade bonds. Fund charge: 0.44% (0.40% management charge, 0.04% additional expenses) Fund code: DPT5 Fund specific risks: 12, 14, 15, 16, 29, 31 Valuation spread: 0.90% LEGAL & GENERAL FidelITY STRATEGIC Bond Fund Risk rating: 3 Middle Fund aim: To achieve a relatively high income with the possibility of capital growth. The fund will obtain exposure primarily to sterling-denominated (or hedged back to sterling) fixed interest securities. The fund may invest directly in fixed interest securities or may achieve exposure indirectly through the use of derivatives. The fund may also invest in other transferable securities, money market instruments, collective investment schemes, cash and nearcash and deposits. Derivatives may be used for efficient portfolio management and investment purposes and may include (but are not limited to) derivatives on exchange rates, interest rates, inflation and credit. The fund may also take positions which enable it to benefit from falling asset prices. Fund charge: 0.61% (0.40% management charge, 0.21% additional expenses) Fund code: 5694 Fund specific risks: 12, 14, 15, 16, 17, 18, 29, 31 Underlying fund type: OEIC

17 Select Portfolio Bond FUNDS KEY FEATURES 17 Legal & GENERAl All StoCKS IndEX Linked Gilt IndEX Fund Risk rating: 3 Middle Fund aim: To track the return of the FTSE Actuaries British Goverment Securities Index-Linked All Stocks Index (after adjustment for charges and tax) by investing in UK Index-Linked Government Securities. In order to accurately track this index the fund will invest in a representative sample of holdings. Fund charge: 0.16% (0.12% management charge, 0.04% additional expenses) Fund code: DXI5 Fund specific risks: 14, 15, 20, 28, 29, 30, 31, 36 Valuation spread: 0.08% LEGAL & GENERAL MANAGED INCOME FUND Risk rating: 3 Upper Fund aim: To provide a high income from a managed portfolio of fixed interest securities, including government and corporate issuers. The fund can invest up to 20% in high yield bonds and investments may be made in stocks traded on overseas markets. Fund charge: 0.58% (0.40% management charge, 0.18% additional expenses) Fund code: 5035 Fund specific risks: 12, 14, 15, 16, 29, 31 Valuation spread: 0.95% LEGAL & GENERAL DISTRIBUTION FUND Risk rating: 3 Upper Natural income option available Fund aim: To generate an income that is sustainable over the long term by investing in a broad mix of assets, including company shares, fixed interest securities, commercial property and other investments. The fund also offers the potential for capital growth over the long term. Fund charge: 0.31% (0.30% management charge, 0.01% additional expenses) Fund code: DBA5 Fund specific risks: 12, 13, 14, 15, 16, 23, 29 Valuation spread: 0.99% (DAZ5 if natural income is required) Legal & GENERAl MIXEd INVESTMENT 20% 60% Fund Risk rating: 3 Upper Fund aim: To provide long-term growth of both capital and income. The fund will invest in shares, fixed interest securities and other assets including those giving indirect exposure to commodities and real property. Between 20% and 60% of the fund will be invested in shares. Fund charge: 0.54% (0.40% management charge, 0.14% additional expenses) Fund code: DYE5 Fund specific risks: 12, 13,14, 15, 16, 29, 31, 33 Valuation spread: 0.47% LEGAL & GENERAL DISTRIBUTION (GROWTH) FUND Risk rating: 3 Upper Natural income option available Fund aim: To maximise returns from a well balanced portfolio over the long term. It can also provide some potential for income. It invests in a broad mix of shares (mainly UK), fixed interest securities, UK commercial property and cash. Fund charge: 0.31% (0.30% management charge, 0.01% additional expenses) Fund code: DDE5 Fund specific risks: 12, 13, 14, 15, 16, 23, 29, 31 Valuation spread: 0.94% (DDF5 if natural income is required)

18 18 Select Portfolio Bond FUNDS KEY FEATURES LEGAL & GENERAL INVESTEC CAUTIOUS MANAGED FUND Risk rating: 3 Upper Fund aim: To provide a combination of income and growth in the value of your investment over the long term. The fund seeks to invest conservatively in a broad range of shares of companies (up to 60% of the fund s value at any time) and bonds (contracts to repay borrowed money which typically pay interest at fixed times) issued by governments, institutions or companies around the world. The bonds invested in will predominantly be of investment grade (high quality) as rated by the credit rating agencies (companies that rate the ability of the issuers of bonds to repay borrowed money) but may also be below investment grade. The fund may invest more than 35% of its assets in securities issued or guaranteed by an European Economic Area state. The fund can also invest in other assets including cash and derivatives (financial contracts whose value is linked to the price of an underlying asset). Derivatives may be used in order to achieve the fund s investment objectives or for efficient portfolio management purposes, for example, with the aim of either managing the fund risks or reducing the costs of managing the fund. Fund charge: 0.69% (0.60% management charge, 0.09% additional expenses) Fund code: 5017 Fund specific risks: 13, 14, 15, 29 Underlying fund type: OEIC LEGAL & GENERAL HENDERSON PREFERENCE and BOND FUND Risk rating: 3 Upper Fund aim: To provide a return by investing primarily in sterling-denominated preference shares, government securities, corporate bonds, Eurobonds and other bonds. Where the fund invests in currencies other than sterling, the fund will always be hedged at least 80% to sterling in aggregate. The fund may invest in other transferable securities, money market instruments, derivatives and forward transactions, deposits and units in collective investment schemes. Fund charge: 0.64% (0.60% management charge, 0.04% additional expenses) Fund code: 5013 Fund specific risks: 12, 14, 15, 16, 17, 18, 29, 35 Underlying fund type: OEIC

19 Select Portfolio Bond FUNDS KEY FEATURES 19 RISK rating 4. Please go to the Fund specific risk definitions section on page 8 to find out what the fund specific risk numbers applied to each fund mean. risk 4 funds LEGAL & GENERAL HIGH INCOME FUND Risk rating: 4 Lower Natural income option available Fund aim: To provide a high income from a portfolio of sub-investment grade fixed interest securities, issued by companies in the UK and overseas. Fund charge: 0.55% (0.50% management charge, 0.05% additional expenses) Fund code: DID5 Fund specific risks: 12, 14, 15, 16, 29, 31 Valuation spread: 1.17% (DMR5 if natural income is required) LEGAL & GENERAL PROPERTY FUND Risk rating: 4 Lower Natural income option available Fund aim: To maximise the return from a portfolio of first class freehold and leasehold interests in commercial and industrial property. This includes industrial warehouse buildings, shopping units and office blocks. The fund will also invest in indirect property vehicles to diversify the portfolio further and manage liquidity levels efficiently. Fund charge: 0.63% (0.40% management charge, 0.23% additional expenses) Fund code: DAE5 Fund specific risks: 23, 29, 31 Valuation spread: 1.25% (DCX5 if natural income is required) Legal & GENERAl KAMES HIGH YIEld Bond Fund Risk rating: 4 Lower Fund aim: To maximise total return (income plus capital) by investing in a portfolio of predominately high-yield bonds, selected investment grade bonds and cash. The fund may hold sterling and other currency-denominated bonds hedged back to sterling. The fund may also invest in deposits, money market instruments, derivative instruments and forward transactions. Fund charge: 0.79% (0.75% management charge, 0.04% additional expenses) Fund code: 5086 Fund specific risks: 12, 14, 15, 16, 17, 29 Underlying fund type: OEIC Legal & GENERAl m&g GloBAL HIGH YIEld Bond Fund Risk rating: 4 Lower Fund aim: To maximise total return (the combination of income and growth of capital) while generating a high level of income. Fund charge: 0.76% (0.60% management charge, 0.16% additional expenses) Fund code: 5024 Fund specific risks: 14, 15, 16, 17, 18, 29 Underlying fund type: OEIC

20 20 Select Portfolio Bond FUNDS KEY FEATURES Legal & GENERAl STANdARd Life GloBAl ABSolUTE RETURN STRATEGIES Fund Risk rating: 4 Lower You should read the Absolute Return Funds Guide before investing in this fund a copy is available from your adviser. If you don t understand any point, please ask for further information. Fund aim: To provide positive investment returns in all market conditions over the medium to long term. The fund is actively managed, with a wide investment remit to target a level of return over rolling three-year periods equivalent to cash plus five per cent per year, gross of fees. It exploits market inefficiencies through active allocation to a diverse range of market positions. The fund uses a combination of traditional assets (such as equities and bonds) and investment strategies based on advanced derivative techniques, resulting in a highly-diversified portfolio. The fund can take long and short positions in markets, securities and groups of securities through derivative contracts. The value of investments within the fund can fall as well as rise and is not guaranteed you may get back less than you pay in. The fund may use derivatives for the purpose of efficient portfolio management and to meet its investment objective. The sterling value of overseas assets held in the fund may rise and fall as a result of exchange rate fluctuations. Fund charge: 0.84% (0.83% management charge, 0.01% additional expenses) Fund code: 5645 Fund specific risks: 12, 17, 18, 29, 34 Underlying fund type: Unit trust Legal & GENERAl MIXEd INVESTMENT 40% 85% Fund Risk rating: 4 Lower Fund aim: To provide long-term growth of both capital and income. The fund will invest between 40-85% in a broad range of UK and overseas companies shares with the balance predominantly in fixed interest securities. Fund charge: 0.56% (0.40% management charge, 0.16% additional expenses) Fund code: DPS5 Fund specific risks: 12, 13, 14, 15, 16, 29, 31, 33 Valuation spread: 0.47% LEGAL & GENERAL NEWTon REAl RETURN Fund Risk rating: 4 Middle You should read the Absolute Return Funds Guide before investing in this fund a copy is available from your adviser. If you don t understand any point, please ask for further information. Fund aim: A total return comprised of long-term capital growth and income by investing in a broad multi-asset portfolio. Fund charge: 0.79% (0.68% management charge, 0.11% additional expenses) Fund code: 5660 Fund specific risks: 12, 13, 14, 15, 16, 17, 18, 21, Underlying fund type: OEIC 29, 34, 35 Legal & GENERAl UK EqUITY INCoME Fund Risk rating: 4 Middle Fund aim: To provide an income in excess of the FTSE All-Share Index yield combined with long-term growth of capital. The fund mainly invests in UK shares which, in the manager s opinion, show potential for sustainable dividend yield, growth and high management quality. Fund charge: 0.88% (0.75% management charge, 0.13% additional expenses) Fund code: DHV5 Fund specific risks: 13, 29 Valuation spread: 0.69% LEGAL & GENERAL THREADNEEdlE UK EQUITY INCOME FUND Risk rating: 4 Middle Fund aim: To achieve an above-average rate of income combined with sound prospects for capital growth. Fund charge: 0.74% (0.67% management charge, 0.07% additional expenses) Fund code: 5729 Fund specific risks: 13, 29 Underlying fund type: OEIC

21 Select Portfolio Bond FUNDS KEY FEATURES 21 Legal & GENERAl BlACKRoCK UK SPECIAl SITUATIoNS Fund Risk rating: 4 Middle Fund aim: To achieve long-term capital growth for investors. The fund invests primarily in the shares of companies incorporated or listed in the UK and will normally have an emphasis on small or medium-sized companies. The fund may also invest in collective investment schemes. Small and medium-sized companies are those whose market capitalisation is lower than that of companies in the FTSE 100 Index at the time of the fund s investment. Fund charge: 0.92% (0.75% management charge, 0.17% additional expenses) Fund code: 5181 Fund specific risks: 13, 19, 29, 35 Underlying fund type: Unit trust LEGAL & GENERAL UK EQUITY INDEX FUND Risk rating: 4 Middle Fund aim: To track the return of the FTSE All-Share Index (after adjustment for charges and tax) by investing in UK shares. In order to accurately track this index the fund will invest in a representative sample of holdings. Fund charge: 0.11% (0.08% management charge, 0.03% additional expenses) Fund code: DFD5 Fund specific risks: 13, 29 Valuation spread: 0.54% LEGAL & GENERAL BNY MElloN LONG TERM GloBAL EQUITY FUND Risk rating: 4 Middle Fund aim: To achieve long-term capital growth by investing in shares (for example, equities) and similar investments of companies listed or located throughout the world. Fund charge: 0.72% (0.65% management charge, 0.07% additional expenses) Fund code: 5728 Fund specific risks: 12, 13, 21, 29, 35 Underlying fund type: OEIC LEGAL & GENERAL THREADNEEdlE GloBAL SELECT FUND Risk rating: 4 Upper Fund aim: To invest the assets of the fund primarily in equities issued by companies worldwide. The portfolio may be concentrated geographically or with respect to stock and sector positions, which may lead to increased levels of volatility. Fund charge: 0.84% (0.67% management charge, 0.17% additional expenses) Fund code: 5003 Fund specific risks: 12, 13, 29 Underlying fund type: OEIC Legal & GENERAl M&G GloBAl DividENd Fund Risk rating: 4 Upper Fund aim: To deliver a dividend yield above the market average, whilst aiming to increase annual distributions over the long term, by investing in a range of global equities. The fund s exposure to global equities may be gained through the use of derivatives. The fund may invest across a wide range of geographies, sectors and market capitalisations. The fund may also invest in other assets including collective investment schemes, other transferable securities, cash and near cash, deposits, warrants, money market instruments and derivatives. Fund charge: 0.91% (0.75% management charge, 0.16% additional expenses) Fund code: 5651 Fund specific risks: 12, 13, 17, 29 Underlying fund type: OEIC

22 22 Select Portfolio Bond FUNDS KEY FEATURES LEGAL & GENERAL OLD MUTUAL UK ALPHA FUND Risk rating: 4 Upper Fund aim: To maximise capital growth through investment in a portfolio of predominantly UK equities. Fund charge: 0.77% (0.67% management charge, 0.10% additional expenses) Fund code: 5725 Fund specific risks: 12, 13, 17, 20, 29 Underlying fund type: Unit trust LEGAL & GENERAL KAMES ETHICAL EQUITY FUND Risk rating: 4 Upper Fund aim: To maximise total return by investment in equities and equity-type securities in companies based in the UK, principally conducting business in the UK or listed in the UK stock market which meets the fund s predefined ethical criteria. Fund charge: 0.79% (0.75% management charge, 0.04% additional expenses) Fund code: 5104 Fund specific risks: 13, 19, 27, 29 Underlying fund type: OEIC LEGAL & GENERAL NEWTON GloBAL INCOME FUND Risk rating: 4 Upper Fund aim: Increasing income and capital growth over the long term by investing in shares (such as equities) and similar investments of companies listed or located throughout the world. Fund charge: 0.71% (0.60% management charge, 0.11% additional expenses) Fund code: 5507 Fund specific risks: 12, 13, 14, 18, 19, 21, 29, 35 Underlying fund type: OEIC LEGAL & GENERAL ETHICAL FUND Risk rating: 4 Upper Fund aim: To track the return of the FTSE 350 Index (after adjustment for charges and tax), not including companies who don t comply with a range of ethical and environmental guidelines. In order to accurately track this modified index the fund will invest in a representative sample of holdings. Fund charge: 0.33% (0.30% management charge, 0.03% additional expenses) Fund code: DBP5 Fund specific risks: 13, 27, 29 Valuation spread: 0.59%