AIB Investment Portfolio Open-ended Funds

Transcription

1 AIB Investment Portfolio Open-ended Funds

2 AIB Investment Portfolio Open-ended Funds Contents The AIB Investment Portfolio 1 Investing for profit 2 Balancing risk and reward 3 Fund risk profile 3 Spreading the risk 4 Take a long-term view 5 Don t ignore inflation 5 Funds from the top names in investment 5 Choosing an Open-ended fund that suits your needs 6 The Fixed-Term Tracker Funds 9 Additional information Open-ended Funds 10 Charges 11 Statutory Information 15 How to start your AIB Investment Portfolio 17

3 The AIB Investment Portfolio When it comes to investing money, few private investors can enjoy the same economies of scale as institutions, which usually have much larger sums of money to invest. However, as a private investor, you don t necessarily have to restrict the scope of your investment ambitions when you put your money to work through the AIB Investment Portfolio. Choice and Service In today s fast moving and highly sophisticated world, we have created the AIB nvestment Portfolio to offer you a practical way to invest your capital: Your money will be pooled with that of many other investors, so it can benefit from valuable economies of scale. We offer a wide range of funds so you can simply choose the fund(s) that holds the types of investment that you prefer. To enable you to enjoy all these advantages, your investment will be arranged through a policy issued by Ark Life Assurance Company Limited, a subsidiary of Aviva Life Holdings Ireland Limited, a joint venture company between Aviva Group Ireland plc and Allied Irish Banks, p.l.c. There are funds carrying different degrees of risk and potential reward. So you can pick the fund(s) that suits you best. Each year, you will receive a Portfolio Statement, detailing the progress of your investment. 1

4 Investing for profit Through the AIB Investment Portfolio, you can choose a fund that invests in a broad range of holdings or funds that are linked to a specific market or sector. For example you may be attracted to a fund that invests in the shares of leading companies in the Eurozone. Or you may prefer one investing in Ireland or in a particular sector such as property. The value of each fund depends on the performance of the investments that the fund manager makes. For example, these investments could be in company shares the value of which tends to rise and fall in line with the business performance of the companies concerned. If a company performs well, the fund manager may eventually be able to sell the shares at a profit. If it doesn t perform well, the value of the shares will probably fall. Over the longer term, stockmarket-linked funds have the potential to provide greater returns than other forms of investment, such as deposits. However, success cannot be guaranteed. 2

5 Balancing risk and reward Fund risk profile a i b i n v e s t m e n t p o r t f o l i o o p e n- e n d e d f u n d s Many of the things we do involve some degree of risk, including driving a car, crossing the road and climbing a ladder. Investing our money is no exception to this rule. Generally speaking, funds that involve a higher degree of risk can produce higher returns over the longer term but their performance can be volatile and you may lose some or all of your money. Past performance should not be regarded as a guide to future performance. Conversely, funds that involve a lower degree of risk are likely to provide relatively modest returns over the longer term but their value could be eroded by inflation. As shown opposite, we have divided the funds in the AIB Investment Portfolio into four different categories and it is important for you to establish the degree of risk that you are willing to accept. You can then select funds for your portfolio with which you feel totally comfortable. Low to medium risk funds - capital secure, return not secure There is no risk to the capital value of the investment at the end of the specified investment period but additional returns may not be guaranteed. These funds may appeal to cautious investors who want to protect their investment but are looking for a potentially higher return than leaving money on deposit. Medium risk funds - neither capital nor return secure The returns on these funds are not guaranteed and you may not get back the full amount you invested. The capital value and the returns from the Investment are both likely to fluctuate regularly. These funds may appeal to investors who are prepared to risk their capital (or on certain funds, a portion of their capital) in exchange for superior potential returns. Medium-to-high risk funds - neither capital nor return secure These are similar to medium risk funds, but the investments are mainly in shares. So the potential rewards and fluctuations in capital value could be greater. These funds may appeal to adventurous investors with a good deal of investment experience who wish to invest over a medium to long term period. High risk funds - neither capital nor return secure These funds involve a high degree of risk to your capital although, as a result, they have the potential to prove highly profitable. These funds may appeal to speculative investors who are willing to take a higher level of risk with their investment over a medium to long term period. This brochure describes the Open-ended Funds within the AIB Investment Portfolio The Fixed-term Tracker Funds are described in a companion brochure that is available on request. 3

6 Spreading the risk We ve all heard the old saying Don t put all your eggs in one basket. The same can be said of your investments. Spreading the risk or diversifying your investments is a concept that involves building a combination of different types of investment funds that can have the effect of potentially reducing some of the risks associated with stockmarket investments. There are six different types of diversification for you to consider and you can obtain the benefit of most of these by investing in a managed fund. Alternatively, you can select a number of individual funds that, in combination, will provide you with the diversification that you want: 1 Diversification within a fund Just by investing through a fund, you are diversifying your investment, because you will almost certainly be sharing in a far greater number of holdings than you would have been able to purchase by yourself. 2 Diversification between asset classes While one type of asset class may be performing badly, one or more of the others may be performing well. So you may want to consider putting some of your money into a managed fund spread across cash deposits, government securities, shares and properties. 3 Diversification across more than one market The same theory applies to investment markets. If all your money is invested in Ireland, the value of your investments will inevitably fall at times when our domestic economy is struggling. On the other hand, if you have also invested in other markets, such as Europe or Asia, some of these markets may be faring better, so the overall value of your portfolio may hold up better. 4 Diversification across industry Another way of diversifying your holdings is to invest in a range of different business sectors (such as financial institutions, properties and so on), so that you hold shares in sectors that are affected in different ways at the various stages of the economic cycle. 5 Diversification between investment managers In the same market conditions, not all investment managers achieve the same level of results. So, it might make sense to allocate at least part of your portfolio to funds that are invested by different managers or management groups. 6 Diversification across risk categories It is not strictly necessary for all your selected funds to be in the risk category that suits you best. You could consider including a small number of other funds with higher and lower risk ratings that, between them, match your overall risk profile. Then you will have the potential to offset losses from some funds with larger possible gains in others. 4

7 Take a long-term view Establishing financial goals and staying the course during market highs and lows can help you achieve your investment aims. Of course we would all like to sell our shares when the market has peaked, just before it starts to fall and then buy them back again at the bottom of the market, just before the recovery begins. However, getting the timing exactly right is virtually impossible, even for the most experienced investors. Don t ignore inflation Inflation is simply a measure of the increase in the price of goods and services in a region. However, despite its simplicity, it can have a serious effect on your investments. Inflation can erode the purchasing power of your investments. Investing in equity and property assets has historically provided the best insulation against the impact of inflation. Past performance should not be regarded as a guide to future performance. Funds from the top names in investment As well as choosing funds from different asset classes, you can access even greater variety by choosing different investment managers and investment styles. The Open-ended Funds within the AIB Investment Portfolio, as described on pages 6, 7 and 8, are managed by Aviva Investors - except where otherwise stated. The additional fund managers are AIB Investment Managers (AIBIM) and BlackRock. Aviva Investors is an international asset management business with almost 280 billion* assets under management. It has access to a global pool of research, a powerful network of asset managers and a team of over 1,100 employees in 16 locations across Ireland, UK, Europe, Asia Pacific and North America. Aviva Investors parent company, Aviva plc, is one of the world s largest insurance organisations. AIB Investment Managers are the investment and asset management arm of the AIB Group. AIBIM s philosophy is to be an active manager and they have a professional team of fund managers and analysts employed who are committed to leading the way in providing modern solutions in fast growing markets. BlackRock, established in 1988, has grown to become the world s largest asset manager, conducting business in over 100 countries. It currently manages over US$3.36 trillion of assets. BlackRock maintains a vigorous focus on delivering the highest level of service, first-class investment performance, comprehensive choice, acknowledged credibility and unparalleled expertise. *Source: Aviva Investors, December Source: BlackRock, 31 March

8 Choosing an Open-ended Fund that suits your needs What is meant by an Open-ended Fund? This is a fund for which, having made your initial choice, you may maintain your investment in it for as long or as short * a period as you wish although we suggest that you should regard it as a medium-to-long term investment, for at least 7 or 8 years. These funds provide no capital security. Due to stockmarket fluctuations, currency movements and changing property values, unit prices can fall as well as rise so investment values are not guaranteed and you may not get back the full amount of money that you put in. The Open-ended Funds within the AIB Investment Portfolio are outlined below, but a more detailed description is set out in the separate individual fund leaflets (or fund brochures where appropriate) which you must read before selecting your fund. 6 Medium risk funds neither capital nor return secure The AIB Managed Fund Series A invests in a carefully monitored portfolio of international shares quoted on the world s major stockmarkets, including those of the UK, the USA and Japan, as well as some of the smaller stockmarkets, particularly those in the smaller European and Far Eastern economies. From time-to-time, the stockmarkets of some emerging economies may also be included. The Fund also invests in Irish and fixed interest securities, properties and cash deposits. The AIB Invest Managed Fund Series A buys units in the AIB Select Managed Fund, which is managed by AIB Investment Managers (AIBIM), a part of the AIB Group. The Fund gains exposure to a range of Irish and international equities, bonds, property and cash. The allocation to each sector reflects the fund managers view of their relative value at any time but between 65% and 80% of the Fund is usually invested in shares. The equity content of the Fund is well diversified. The AIB Blackrock European Absolute Return Fund Series A seeks to achieve positive returns across all market conditions, by investing in a portfolio of equities and equity related securities (including derivatives) of companies incorporated or listed in the European economic area and Switzerland. It has the freedom to invest in synthetic-short investments; pair trades and also has the flexibility to switch up to 100% of the portfolio into cash if the market environment dictates. This fund is managed by BlackRock and invests in the BSF European Absolute Return Fund. Please see the Investing in Absolute Return Funds brochure for full details. * Please note that an early encashment charge may apply to your investment in the first five years. BlackRock Strategic Funds. Medium risk funds (Continued) neither capital nor return secure The AIB Multimanager Fund Series A invests in AIBIM s Multimanager Managed Fund which is a Unit Trust and sub-fund of AIBIM s Select Portfolio. The AIB Multimanager Fund Series A is designed to benefit from the skills of some of the very best investment managers in the world. AIBIM employs rigorous and disciplined analysis techniques to identify and appoint the best in class investment managers for each of the Fund s investment sectors. The Fund therefore benefits from a team of managers with outstanding and complementary qualities. The underlying funds focus largely on the equity sector, but the Fund also has exposure to fixed interest and property assets. Assets and geographic decisions are made with reference to a consensus allocation. The AIB MultiTrack Fund Series A spreads your money across a widely diversified portfolio, which spans all the world s major stockmarkets and also offers exposure to Eurozone bonds. The Fund achieves this diversity by holding a portfolio of securities that provides exposure to the more than 1,700 companies and bonds making up a number of chosen indices. The AIB UK Property Fund Series A invests, through an underlying unit trust, in high quality commercial properties in the UK, and rents them out on long-term leases. It also holds some real estate securities. Property values tend to move differently from bonds and equities and the capital value is likely to be more stable. The AIB European Commercial Property Fund Series A invests in a portfolio of commercial properties (plus some exposure to real estate securities) in the European Economic Area (excluding the UK but with the addition of Switzerland). The Fund offers investors the prospect of stable returns (through rent and dividend reinvestment) and capital growth.

9 Medium-to-high risk funds neither capital nor return secure The AIB Irish Fund Series A invests only in the Irish stockmarket. Most of the investments are in large companies although there may be some exposure to small and medium sized companies that have the potential to achieve dynamic growth. The AIB Eurozone Fund Series A invests in the shares of companies that are based in the Eurozone the countries which have adopted the euro as their common currency. The AIB Global Fund Series A holds a carefully selected and monitored portfolio of shares in large companies, quoted on the world s major stockmarkets including the USA, the UK, Europe and Japan. It may also include some exposure to companies listed on some of the smaller stockmarkets including the Far Eastern and Australasian markets. The AIB High Yield Equity Fund Series A invests in the shares of around 40 major companies, typically in the financial, manufacturing, utility and telecommunications sectors. These well-established companies are carefully selected because of the above average levels of dividend that they pay and their expected resilience during periods of stockmarket volatility. These holdings are likely to prove less volatile than conventional equities, but capital values are not guaranteed. The AIB Euro Financials Fund Series A invests in the shares of Banking, Financial Services and Insurance companies based in the Eurozone. The Fund is actively managed and seeks out undervalued financial stocks with superior earnings momentum and strong management which provides plenty of scope for the Fund Manager to add value through active stock selection. High risk funds neither capital nor return secure The AIB Target 20 Fund Series A consists of a tightly knit portfolio of just 20 companies, selected on the basis of their fundamental strength and prospects, from whichever sectors, themes and stockmarkets the managers consider to be the most promising. Each company excels in its field of business and has a high and increasing market share. Some may have suffered from a recent downturn in business, but may be poised for recovery. The fields of business could typically include technology, energy, raw materials, consumer goods, insurance and banking. The Fund has a relatively aggressive investment strategy and the value of its holdings may be subject to sudden and large falls in value. The AIB Geared High Yield Equity Fund Series A uses bank borrowings to increase the performance potential of the Fund. It invests in the shares of around 40 major companies, selected because of the above average levels of dividend that they pay and their expected resilience during periods of stockmarket volatility. Please see the separate Guide to Gearing for further details. High risk funds (Continued) neither capital nor return secure The AIB Geared European Commercial Property Fund Series A uses bank borrowings to increase the performance potential of the Fund. It invests in a portfolio of commercial properties (plus some exposure to real estate securities) in the European Economic Area (excluding UK but with the addition of Switzerland). Please see the separate Guide to Gearing for further details. The AIB Asia Pacific High Yield Equity Fund Series A offers investors exposure to equities from the Asia Pacific region that are selected for their growth and dividend potential. The fund holds approximately 50 stocks, from various countries in the region, that have a focus on producing positive equity returns and high dividends. Those Asia Pacific Region companies that do pay high dividends have tended to out-perform their lower yielding competitors. The AIB BlackRock World Gold Fund Series A is a specialised actively managed fund that aims to achieve long-term capital growth by investing in a diversified portfolio of companies whose main activity is gold mining. It may also invest in companies whose predominant activity is other precious metals, minerals, base metals or indeed metal mining. The fund does not hold physical gold or metal. The fund invests in a euro hedged share class with the aim of minimising the effects of currency fluctuations for euro investors. This fund invests in the BGF World Gold Fund. Please see the Investing in Natural Resources brochure for full details. The AIB BlackRock World Mining Fund Series A is a relatively diversified portfolio of companies that are predominantly involved in the production of base metals and industrial minerals such as iron ore and coal. The Fund may also invest in gold or other precious metal or mineral mining companies. The Fund does not hold physical gold or metal. The fund invests in a euro hedged share class with the aim of minimising the effects of currency fluctuations for euro investors. This fund invests in the BGF World Mining Fund. Please see the Investing in Natural Resources brochure for full details. The AIB BlackRock World Energy Fund Series A invests globally in traditional energy companies of all sizes. By using a portfolio of companies, the Fund aims to generate returns from companies that explore for, produce or transport oil, gas, coal and uranium, as well as those companies that provide services to these industries. Additionally, the Fund may invest in companies seeking to develop and exploit new energy technologies. The fund invests in a euro hedged share class with the aim of minimising the effects of currency fluctuations for euro investors. This fund invests in the BGF World Energy Fund. Please see the Investing in Natural Resources brochure for full details. BlackRock Global Funds. 7

10 High risk funds (Continued) neither capital nor return secure The AIB BlackRock New Energy Fund Series A is a relatively diversified portfolio of holdings investing in companies that manufacture equipment to produce energy (e.g. wind turbines), as well as companies that supply alternative energy (e.g. solar power farms). Emphasis may be given to renewable energy, automotive and onsite power generation, energy storage and enabling energy technologies, such as electricity transmission, metering and emissions trading. The base currency of the Fund is in US dollars. The AIB BlackRock New Energy Fund invests in a euro dealing share class and therefore is fully exposed to fluctuations in currency exchange rates. This means investors in this fund are fully exposed to currency risk. This fund invests in the BGF New Energy Fund. Please see the Investing in Natural Resources brochure for full details. BlackRock Global Funds. PLEASE NOTE THAT THE PERFORMANCE OF THE high-risk FUNDs is LIKELY TO BE MORE VOLATILE THAN THAT OF THE OTHER FUNDS. Warning: Warning: Warning: Warning: Past performance is not a reliable guide to future performance. The value of your investment may go down as well as up. These funds may be affected by changes in currency exchange rates. WITHDRAWALS and switches from the property funds may be deferred for up to six months. A secure fund in times of uncertainty The AIB Cash Fund Series A If, at any future stage, you become concerned about the prospects for the world s stockmarkets, you may switch all or part of your investment (as described on page 11) into a further fund. This is the AIB Cash Fund Series A, which is only available for switching purposes. It invests in cash and other secure investments so your capital will be completely safe. Your returns will depend on the rates of interest that the managers can earn on the money. It has lower overall growth prospects than the other funds, so you should only invest in it for short periods. Please note that, if you have invested in the AIB UK Property Fund Series A, the AIB European Commercial Property Fund Series A or the AIB Geared European Commercial Property Fund Series A, any switch may be deferred, as described in note 4 below. Notes about your fund choice 1. Investment values and unit prices are not guaranteed; they can fall as well as rise, as a result of fluctuations in stockmarket values, currency levels and/or interest rates and you may not get back the full amount invested. 2. From time to time, some of the funds may also hold a proportion of their assets in cash. 3. For further details of fund offers, please refer to the individual fund leaflets (or fund brochures where appropriate). 4. Property investments cannot be sold as easily or quickly as equities or bonds so, in order to protect the interests of the remaining investors, we reserve the right to defer withdrawals, encashments (and any switch to another fund) from the AIB UK Property Fund Series A, the AIB European Commercial Property Fund Series A or the AIB Geared European Commercial Property Fund Series A for up to six months. 5. Under Ark Life s agreement with BlackRock, the AIB BlackRock unit linked fund described herein is not available for distribution to, or investment by, US residents or citizens. They may not be directly or indirectly offered or sold in the USA or any of its territories or possessions or areas subject to its jurisdiction or to or for the benefit of a US Person. 8

11 The Fixed-Term Tracker Funds The AIB Investment Portfolio also gives you access to a range of Fixed-Term Tracker Funds. Fixed-Term Tracker Funds have proved extremely popular over recent years. Disappointed by the generally low rates of interest payable on conventional deposit accounts, many investors have sought a more rewarding home for their capital. How a Fixed-Term Tracker Fund works The Fixed-Term Tracker Funds don t invest directly in individual shares or other holdings. Instead, their returns are linked to the performance, over the specified initial investment period, of one or more specified stockmarket indices. This means that these funds achieve their returns in a passive way and they are not dependent on the skills of any investment managers. Instead of investing your money directly in the stockmarket, it is placed in a special tracker policy. Through this, at the end of the specified investment period: You will have the prospect of attractive returns, linked to the performance of a specified index or indices. Your investment will have full capital security - you will have the peace of mind in knowing your original capital will be returned at the end of the specified investment period. Please be aware that the stockmarket indices take no account of the dividends that you would receive if you were to invest directly in the shares of the companies that make up the indices. Also, don t forget that inflation will reduce the buying power of your money in the future. You will find detailed description of the available funds in a separate brochure describing the Fixed-Term Tracker Funds (and in the individual fund leaflets), which you must read before selecting a fund. There may be occasions where we offer you the option of a Fixed-term Tracker Fund with less than 100% capital security. If you invest in such a product, you may not get back the full amount you invested. So, if the relevant indices fall in value over the specified investment period, you will earn no return on your money but your initial investment will be returned in full. On the other hand, if the relevant indices rise in value over the period and there is a positive overall return, in addition to receiving back your original capital, you will share in a proportion of the market growth. 9

12 Additional Information Open-ended Funds The AIB Investment Portfolio is a single premium investment policy issued by Ark Life Assurance Company Limited, a subsidiary of Aviva Life Holdings Ireland Limited, a joint venture company between Aviva Group Ireland plc and Allied Irish Banks, p.l.c. For Additional Information on the Fixed-Term Tracker Funds, the AIB Blackrock European Absolute Return Fund, the AIB Natural Resources Funds and the AIB Geared Funds, please refer to the appropriate brochures which are available on request from your AIB Financial Adviser. A pooled investment Your money will be pooled with that of all the other investors and your share of the relevant fund will be expressed as a number of units in the Fund. Two sources of profit in the Open-ended Funds The Open-ended Funds have the potential to make profits in two different ways: 1. Investment growth The underlying shares and bonds will largely be selected on the basis of their prospects for achieving capital growth thereby increasing the value of the Fund. 2. Investment income Most of the underlying shares will generate a flow of dividend income, while the underlying bonds will automatically provide a fixed income. This income will be used to make further investments for the Fund thereby increasing both its capital value and the income that it will earn in the future. Investing in the Portfolio The minimum initial investment in the AIB Investment Portfolio is _15,000 *. The minimum investment in each individual fund is _600 and up to 10 funds can be selected at outset (subject to an overall minimum investment of _15,000 * ). However, the minimum investment in the AIB European Commercial Property Fund Series A, the AIB Geared European Commercial Property Fund Series A or the AIB Geared High Yield Equity Fund Series A is E50,000. The AIB Investment Portfolio is available to everyone who, at the outset, is between age 18 and 80 attained. Please see note 5 on page 8. * If a regular income is selected from an Open-ended Fund (see page 11), the minimum investment is _30,000. Special terms for larger investments in certain funds If you invest _250,000 or more in any of the Open-ended Funds you will benefit from specially attractive terms. Life Assurance Premium Levy In accordance with the Stamp Duties Consolidation Act 1999 (as amended), a levy is payable on life assurance premiums (currently 1%). Ark Life will pay this levy out of the money received from you and the balance will be invested in your AIB Investment Portfolio. 10

13 Adapting to change If you invest in an Open-ended Fund, you may switch all or part of your money to any other Open-ended Fund at any time*. Alternatively, you may switch your money to any fixed term tracker fund available from Ark Life for this purpose from time to time. * If you have invested in the AIB UK Property Fund Series A, the AIB European Commercial Property Fund Series A or the AIB Geared European Commercial Property Fund Series A, please see Note 4 on page 8. For further details about the switching options available from time to time, please contact your local AIB Financial Adviser. Please refer to details of the switching fees opposite. Access to your money You can elect to take an income or make encashments at any time (although we recommend that you maintain your investment for at least 7 to 8 years). Regular income You can take an income monthly, quarterly, half-yearly or yearly and it can be paid into a bank or building society account. The minimum regular income is e750 per annum and the maximum amount is 6% of your initial investment per annum. All regular income payments are taken as a percentage of your initial investment and are therefore fixed. Not all of the Open-ended Funds allow a regular income to be taken. Please speak to your AIB Financial Adviser for further details. Encashments You can withdraw money from your policy whenever you require, simply by instructing us in writing. The minimum amount you can withdraw is e1,000. Charges No set up charges The traditional bid/offer spread does not apply and there is no policy fee. Early encashment charge Should you need to encash your policy within the first 5 years there is an early encashment charge on the amount withdrawn as outlined below. Years Charge 5% 5% 5% 3% 1% The charge does not apply to withdrawals (regular income and/or encashments) with a combined total of less than 6% of the original investment in any policy year. Switching fee The first six switches between funds in each policy year will be carried out free of charge. For each additional switch, a charge (currently _30) will be made, in order to cover administrative costs. Switching money between the Open-ended Funds is not subject to the early encashment charge outlined above. Charges are continued on the following page... These withdrawals (regular income and/or encashments) are provided by cancellation of units, which will reduce the overall value of your fund. If your policy is to remain in force the value of your remaining units must be at least e2,500. Any combined withdrawals taken in a policy year, which are greater than 6% of the original investment will be subject to the early encashment charge outlined opposite if applicable. Please be aware that any withdrawals (regular income and/or encashments) taken from your fund will impact on your policy s value and growth potential. Please note that any withdrawals (regular income and/or encashments) from the property funds may be deferred for up to 6 months. 11

14 Fund Charge* Our Open-ended Funds have a Fund Charge as outlined below, which accrues to Ark Life. Fund AIB Cash Fund Series A AIB Managed Fund Series A AIB Invest Managed Fund Series A AIB BlackRock European Absolute Return Fund Series A AIB High Yield Equity Fund Series A AIB Multimanager Fund Series A AIB UK Property Fund Series A AIB European Commercial Property Fund Series A AIB MultiTrack Fund Series A AIB Global Fund Series A AIB Eurozone Fund Series A AIB Euro Financials Fund Series A AIB Irish Fund Series A AIB Target 20 Fund Series A AIB Asia Pacific High Yield Equity Fund Series A AIB BlackRock World Gold Fund Series A AIB BlackRock World Mining Fund Series A AIB BlackRock World Energy Fund Series A AIB BlackRock New Energy Fund Series A Charge 1.00% per annum 1.00% per annum 1.10% per annum 1.65% per annum** 1.00% per annum 1.25% per annum plus third party fees 1.50% per annum 1.65% per annum 1.15% per annum 1.15% per annum 1.15% per annum 1.25% per annum 1.15% per annum 1.15% per annum 1.25% per annum 1.65% per annum 1.65% per annum 1.65% per annum 1.65% per annum On our geared funds we apply the fund charge to the gross asset value (GAV) of the fund, i.e. to the policyholder s money and any borrowings made by the fund on behalf of the policyholder. The fund charges are currently: AIB Geared European Commercial Property Fund 1.20% per annum (GAV) AIB Geared High Yield Equity Fund 0.75% per annum (GAV) * Fund Charges The direct costs of buying and selling assets and of maintaining property assets are borne by the Funds themselves. **In addition to this charge, the underlying BSF European Absolute Return Fund incorporates a performance fee, linking BlackRock s remuneration more closely to the performance of the Fund. The performance fee is 20% of outperformance over the hurdle (3-month EURO LIBOR***) and when the current net asset value (NAV) is higher than the High Water Mark (HWM). The HWM is the higher of the initial launch Net Asset Value and the last NAV for which a performance fee has been paid. Where the current NAV is below the HWM, or the NAV is below the hurdle, no performance fee will be accrued until the underperformance has been made good. BlackRock only takes a performance fee when the Fund not only generates an absolute return, but outperforms both the hurdle & HWM. If the Fund underperforms both the hurdle and the HWM, BlackRock will not charge a performance fee. This performance fee is reflected in the share price Ark Life receive from BlackRock. A separate publication entitled Performance fees explained outlining BlackRock s performance fee accompanies this document. *** Euro LIBOR is the London Interbank Offer Rate denominated in euros. This is the interest rate that banks offer each other for large short-term loans in euros. Third Party Fees The AIB Multimanager Fund Series A invests in an underlying Fund that benefits from the expertise of a number of third party investment managers. Fees are paid to these investment managers by the underlying Fund. The underlying Fund generally avoids initial investment charges and receives substantial reductions in investment management fees with all rebates received being credited in full to the Fund. The net management fee payable by the Fund through the third party funds chosen is currently expected to be no more than 0.60% p.a. but may change over time due to the funds chosen and the asset allocation policy. At the target level of gearing, this would be equivalent to a fund charge of 2.4% p.a. on the policyholder s money only. At the target level of gearing, this would be equivalent to a fund charge of 1.5% p.a. on the policyholder s money only. Unit price adjustment There may be circumstances where the number and/or amount of investor withdrawals from the fund leads to a need to sell a proportion of the underlying assets. In such circumstances, Ark Life reserves the right to adjust the unit price of the funds, to reflect the costs involved in selling the necessary assets. As a result, investors withdrawing money would bear the costs of realising all or part of their investment. For funds holding a significant proportion of property-related assets, given the costs associated with buying and selling properties, this adjustment can be significantly higher than that applying to funds invested in other asset classes. Notification of changes to charges We reserve the right to increase the fund charges and fees in circumstances in which it is necessary to do so for the protection of Ark Life s financial wellbeing. Should any increase in the fund charges and fees occur you will be given one month s notice of such an increase. The Fund Charge applies to the value of the investments and is deducted daily from the Fund. Ark Life may from time to time close or merge the funds or offer the opportunity to invest in new funds not listed previously. These new funds may have Fund Charges different to those shown previously. 12

15 The current tax position In accordance with the Taxes Consolidation Act, 1997 (as amended), a tax liability levied on any profit that the policy has achieved may arise as and when: a withdrawal is made from the policy (subject to the terms of your policy) you cash-in the policy the value of the policy is paid out on death (subject to the terms of your policy) the policy, at any time during its lifetime, is assigned* or transferred to another party, the policy is assigned into a trust after the inception date or the trust attaching to the policy is revoked OR the expiration of 8, 16, 24 or any other multiple of 8 years that has occurred since your policy commenced. All tax deductions will be made automatically from the policy, at the prevailing rate for life assurance policies (currently 28%). * Other than in certain cases, such as when the assignment is to provide security for a borrowing or the assignment is between spouses. Payment on death In the event of your death while the policy is still in force, the amount payable will be 101% of the bid value of the units on notification of death. In the case of a jointly owned policy, the payment will be made on the death of the second of the two investors to die. In the event of your death, your family (or any legal representative acting for them) should notify Ark Life, in writing, as soon as possible. Some formalities will be necessary, including the production of the policy document. However, these requirements will be kept to a minimum and we will act promptly to ensure that payment is made as soon as possible. Important additional information about each fund The details that apply to your investment will vary according to the fund that you choose. We have therefore set out the relevant details in separate fund leaflets (and fund brochures where appropriate), each describing one of the funds. Please study these carefully. Structure of the geared funds The AIB Geared European Commercial Property Fund and the AIB Geared High Yield Equity Fund invest in Unit Trusts managed by Aviva Investment Finance Ireland Limited (AIFIL), a unit trust management subsidiary within the Aviva Group. AIFIL has made the following appointments in relation to the management of the Unit Trusts: AIB Bank to provide the gearing. JP Morgan (Ireland) Ltd to administer the unit trusts and provide custodial services. Note: 1. AIFIL reserves the right to alter these arrangements as appropriate. 2. Please see the separate Guide to Gearing for further details. Writing your policy under Trust If you wish, your policy can be placed under Trust for the benefit of a member of your family. If your policy is already in force when you ask us to place the policy under Trust, a tax charge may be incurred. Following your policy s progress To enable you to monitor your investment, Ark Life will tell you how many units in each fund have been allocated to your policy. Unit prices of the Open-ended Funds are shown in the main national newspapers every week. Each year, you will receive a Portfolio Statement, detailing the progress of your investment and the prospects for the markets in which you may have invested. If you are an AIB customer with 24-hour Internet banking, you can have secure access at any time to a personal screen showing the value of your investment. Suitability You should not consider investing in a fund within the AIB Investment Portfolio unless you are fully satisfied with the nature of this commitment, taking into account you financial needs and resources. 13

16 A commitment to quality service Ark Life is committed to the provision of the highest possible standards of customer service. However, if you are ever dissatisfied with any aspect of our service, do please let us know. We take all complaints very seriously and aim to investigate any shortcomings as speedily as possible. If you wish to complain about any aspect of the service that you have received, please contact Ark Life directly. If your complaint is not dealt with to your satisfaction, you may complain to: Financial Services Ombudsman s Bureau, Address: 3rd Floor, Lincoln House, Lincoln Place, Dublin 2 Lo-call: Fax: (01) enquiries@financialombudsman.ie Website: Full details of the remit of the Financial Services Ombudsman s Bureau can be obtained directly from their office. To enable Ark Life to assess the quality and consistency of its customer service, phone calls to and from our office may be recorded from time to time. Ensuring the policy meets your needs Shortly after your policy has started, we will send you the full documentation governing your policy. You will then have a cancellation period of 30 days, from the date on which your investment document is issued, to change your mind. Should you wish to cancel the arrangement, simply return the documents and a signed notice of cancellation to: The Customer Services Manager, Ark Life Assurance Company Limited, One Park Place, Hatch Street, Dublin 2. Please note that Ark Life will deduct from the amount returned any fall in the value of the investment up to the time of cancellation. Please read the Statutory Information section on pages 15-17, provided in accordance with Regulation 6(1) of the Life Assurance (Provision of Information) Regulations A word of warning please note that the open-ended funds within the aib investment portfolio do not guarantee your capital. the value of the fund s assets can go down as well as up and, depending on when you withdraw your money, you may not get back the full amount that you invested. 14

17 a i b i n v e s t m e n t p o r t f o l i o - o p e n- e n d e d f u n d s Statutory Information Provided in accordance with Regulation 6(1) of the Life Assurance (Provision of Information) Regulations 2001 A Information about the policy 1 Make sure the policy meets your needs i The purpose of the policy is medium to long term investment. ii Your investment in a Fund from the AIB Investment Portfolio is a single premium investment policy. iii You have chosen to invest a single lump sum at the outset. Your investment in any Open-ended Fund within the AIB Investment Portfolio may be cashed-in at any time (please see Early encashment charge on page 11); however, we recommend that you maintain your investment for at least 7 to 8 years. You should not consider investing in a fund within the AIB Investment Portfolio unless you are fully satisfied with the nature of this commitment, taking into account your financial needs and resources. iv We are required to advise you, if appropriate, about the financial consequences and possible financial loss that could result from investing in a fund from the AIB Investment Portfolio to replace, in whole or in part, an existing policy with Ark Life or any other life assurance company. If you are substituting all or part of any existing policy in this way, you must advise us of this in your application form, so that the implications and possible financial loss can be explained to you by an AIB Financial Adviser. You must also sign the relevant declaration on the application form. WARNING If you propose to take out this policy in complete or partial replacement of an existing policy, please take special care to satisfy yourself that this policy meets your needs. In particular, please make sure that you are aware of the financial consequences of replacing your existing policy. If you are in doubt about this, please contact your insurer or insurance intermediary. STATEMENT ON REPLACEMENT POLICIES You should NOT reduce or cease an existing life assurance or critical illness policy in order to replace it with an AIB Investment Portfolio. The financial consequences could prove very serious indeed, for either yourself or your dependants, if you were to reduce your protection in this way. Similarly, you should NOT reduce your contributions into any pension policy in order to replace it with an AIB Investment Portfolio, as a pension policy enjoys substantial tax benefits. If you can afford to do so, you should probably keep any existing savings policy in force and take out an AIB Investment Portfolio in addition, otherwise you will lose the benefits of the existing policy, including possible extra benefits for contributing for a certain duration. If you are replacing a savings policy with another company, you should ensure that you are made fully aware of the financial consequences of any such replacement. 2 What happens if you want to cash-in your policy early? Money in any Open-ended Fund may be encashed at any time for the value of the units attaching (please see Early encashment charge on page 11). The surrender value may be less than the amount you invested in the policy at the outset. If you are considering investing in the AIB UK Property Fund Series A, the AIB European Commercial Property Fund Series A or the AIB Geared European Commercial Property Fund Series A, please see Note 4 on Page 8. 3 What are the projected benefits under the policy? ILLUSTRATIVE TABLE OF PROJECTED BENEFITS AND CHARGES (NET OF GOVERNMENT LEVY). Year Total amount of premiums paid into the policy to date Projected investment growth to date Projected expenses and charges to date Taxation to date Projected policy value after payment of taxation A B C D E=A+B-C-D E E E E E 1 15, , ,000 1,836 1, , ,000 2,823 1, , ,000 3,858 1, , ,000 4,945 1,042 1,093 17, ,000 10,997 1,892 2,549 21, ,000 18,290 3,147 4,240 25, ,000 26,892 4,626 6,234 31,032 Warning: These figures are estimates only. They are not a reliable guide to the future performance of this investment. IMPORTANT: THESE ILLUSTRATIONS ASSUME A RETURN OF 6% PER ANNUM. THIS RATE IS FOR ILLUSTRATION PURPOSES ONLY AND IS NOT GUARANTEED. ACTUAL INVESTMENT GROWTH WILL DEPEND ON THE PERFORMANCE OF THE UNDERLYING INVESTMENTS AND MAY BE MORE OR LESS THAN ILLUSTRATED. THE IMPACT OF THE EXPENSES ON YOUR POLICY IS THAT THE 6% RETURN ASSUMED ABOVE IS REDUCED BY 0.9% EACH YEAR. NOTE: THE ABOVE ILLUSTRATIONS REFLECT THE TAXATION OF LIFE ASSURANCE POLICES AS PER THE Taxes Consolidation Act, 1997 (as amended). IN ADDITION, THE ILLUSTRATIONS ALLOW FOR ANY TAX DUE BEING DEDUCTED FROM THE FUND ON THE 8TH AND 16 TH POLICY ANNIVERSARIES. Note: In accordance with the Stamp Duties Consolidation Act 1999 (as amended) a levy is payable on life assurance premiums (currently 1%). The payment amount received by Ark Life will be reduced by the government levy amount due and the resulting premium amount will be invested in the AIB Investment Portfolio as illustrated in the example above. * The illustration reflects the year by year progress of your investment AND ALLOWS FOR any early encashment charges which WILL be applied IN YEARS 1 TO 5 (see page 11). The benefits illustrated in these Tables are for a single premium of e15,000. The actual returns and charges on your policy may differ from those illustrated in the above table, depending on the funds selected. The above projections assume that your investment will be in the AIB Managed Fund Series A. The Fund Charge applicable to this Fund is 1.0% p.a. 4 What intermediary/sales remuneration is payable? ILLUSTRATIVE TABLE OF INTERMEDIARY/SALES REMUNERATION Year Premium payable in that year (e) Projected total intermediary/ sales remuneration payable in that year (e) 1 15, The projected total intermediary/sales remuneration payable represents the amounts payable by Ark Life to AIB Bank. 15

18 a i b i n v e s t m e n t p o r t f o l i o - o p e n- e n d e d f u n d s 5 Are the returns guaranteed? The benefits illustrated in the Table set out in Section 3 are not guaranteed. They will not be achieved if the investment returns earned are lower than we have assumed in the illustration. 6 Can the policy be cancelled or amended by the insurer? i We reserve the right to increase the charges and fees in circumstances in which it is necessary to do so for the protection of Ark Life s financial well-being. Should any increase in the charges and fees occur you will be given one month s notice of such an increase. The Fund Charge applies to the value of the investments and are deducted daily from the Fund. Ark Life may from time to time close or merge the funds or offer the opportunity to invest in new funds not listed previously. These new funds may have Fund Charges different to those shown previously. ii Ark Life may change the terms of your policy in order to comply with, or take account of, any future changes in tax and/or other legislation. iii The policy may only be issued to people who are between ages 18 and 80 attained. So, if it is discovered that an investor was under or over the permitted ages when the policy was issued, Ark Life may cancel the policy and return the single premium paid less a deduction in respect of any fall in the value of the underlying investments since its inception, plus any charges or expenses incurred. 7 Information on taxation issues Ark Life will deduct tax from this policy in accordance with the Taxes Consolidation Act, 1997 (as amended). Under current legislation Ark Life must deduct tax from the value of the policy in certain circumstances: i. Tax on any profit element of the sum involved will be deducted when any money is withdrawn from the policy, either as a partial or full encashment. ii. Tax on any profit on the policy will be payable if and when the policy is assigned (other than in certain cases, such as where the assignment is to provide security for a borrowing - or the assignment is between spouses) or when the policy is assigned into a trust after the inception date or the trust attaching to the policy is revoked. iii. Tax on any profit on the policy will be payable every eight years (based on any profit on the policy at the time that has not already been taxed). Where this tax is deducted any tax payable on subsequent withdrawals will be reduced by this tax, or a portion thereof, as appropriate. iv. The amount payable on death is subject to tax in the same way as on an encashment or withdrawal. In addition, your beneficiaries may have to pay inheritance tax. It may be possible to offset part of the tax deducted from your policy against the inheritance tax liability. You should contact your tax adviser for advice on whether this is possible in your particular circumstances. All tax deductions from the policy will be made by Ark Life at the rate then applicable to the life assurance policyholders. At the time of writing this rate was 28%. 8 Additional information in relation to your policy i If a new policy is issued, you will have the right to cancel your investment within the following 30 days and, if you would like to cancel the arrangement, simply return the documents and signed notice of cancellation to The Customer Services Manager, Ark Life, One Park Place, Hatch Street, Dublin 2. Please note that Ark Life will deduct from the amount returned any fall in the value of the investment up to the time of cancellation. ii The contract between us is subject to the laws of the Republic of Ireland. iii For further information or if you wish to complain about any aspect of the service you have received please contact Ark Life directly. If your complaint is not dealt with to your satisfaction, you may complain to: Financial Services Ombudsman s Bureau, Address: 3rd Floor, Lincoln House, Lincoln Place, Dublin 2 Lo-call: Fax: (01) enquiries@financialombudsman.ie Website: Full details of the remit of the Financial Services Ombudsman s Bureau can be obtained directly from their office. B Information about the insurer/insurance intermediary i The policy is issued by Ark Life Assurance Company Limited, a subsidiary of Aviva Life Holdings Ireland Limited whose principal business is the provision of life and pensions business. ii You can contact Ark Life: By post or personal visit: One Park Place, Hatch Street, Dublin 2 By telephone: (01) By fax: (01) By info@arklife.ie iii The Funds within the AIB Investment Portfolio are promoted by AIB Bank. iv You can contact AIB Bank: At any AIB Bank branch. v The sales employee is an AIB Financial Adviser. His/her name is shown in the box opposite. vi You can contact your AIB Financial Adviser: At any AIB Bank branch. vii Ark Life is based in the Republic of Ireland. viii Ark Life Assurance Company Limited is a subsidiary of Aviva Life Holdings Ireland Limited, a joint venture company between Aviva Group Ireland plc and Allied Irish Banks, p.l.c. ix AIB Bank is a tied agent of Ark Life for life and pensions business. x Ark Life Assurance Company Limited and Allied Irish Banks, p.l.c. are regulated by the Financial Regulator. 16