Standard Life Global Absolute Return Strategies Fund

Transcription

1 Standard Life Global Absolute Return Strategies Fund

2 Contents 03 Introduction to Global Absolute Return Strategies Fund 04 How does GARS work? 06 Who looks after your money? 07 4 reasons to consider GARS 08 Why choose Standard Life? 09 About Standard Life Investments 10 Important things to consider Make hay even when the sun doesn t shine.

3 Standard Life Global Absolute Return Strategies Fund The Standard Life Global Absolute Return Strategies (GARS for short) fund is an absolute return fund. It doesn t aim to match or track a market or similar benchmark. Instead, it aims to make money also when markets are going down, as well as when they are going up. It also means GARS can help your money to grow smoothly as it aims to iron out short term fluctuations in markets. It has a target return of cash* +5% per annum (gross of charges) over rolling three year periods. This means that over any given three year period, we would expect the average yearly return to be 5% greater than the return available on cash* over that period (before charges) although remember this isn t guaranteed. Talk to your financial adviser about how GARS can help meet your long term savings or pension goals. * As measured by the six month European Interbank Offer Rate (Euribor) Warning: If you invest in this fund you may lose some or all of the money you invest. Warning: The value of your investment may go down as well as up. Warning: This investment may be affected by changes in currency exchange rates. Global Absolute Return Strategies Fund 03/12

4 How does GARS work? GARS aims to grow your investment more smoothly than traditional investment funds such as a Managed Fund. To achieve this, GARS is designed with the potential to make money in all market conditions including times when markets are falling. To make this possible, GARS has a wide choice of investments which spreads the investment risk and making GARS more resilient during times when markets are unsteady. At the same time it uses a much wider range of tools and techniques to achieve its objective. Importantly, these tools and techniques allow the fund to invest so that, even if market prices fall, the fund still has the potential to make money. What does GARS invest in? 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. Split of strategy grouping by risk contribution at 30 June 2015 Equities Foreign Exchange Duration Stock selection Credit Volatility Source: Standard Life Investments 04/12 Global Absolute Return Strategies Fund

5 Description of strategy groups Below are the descriptions of the strategy groups that GARS may hold. Equities Offers the potential to achieve long term reward for investors. The Fund may hold a diversified range of direct equity investment as well as market index derivatives to benefit from absolute and relative performance opportunities. Foreign Exchange GARS has the potential to profit from movements in global currencies using currency forwards and other derivatives. Duration Strategies that exploit movements up or down the interest rate curve are often accessed through government bond or interest rate derivatives. Stock selection The Fund aims to add value to performance though active management from Standard Life Investments fund managers. Credit Corporate bonds issued by companies generally offer higher yields than government bonds to compensate the higher default risk. Volatility There are numerous derivative strategies available for taking advantage of increases or decreases in the volatility of markets. Property The Fund may hold property investments in both listed property companies and property index derivatives. Inflation The Fund may invest in strategies that exploit movements in inflation in different markets. These may be accessed through index-linked government bonds or inflation derivatives. Global Absolute Return Strategies Fund 05/12

6 Who looks after your money? A team of over 40* skilled investment professionals at Standard Life Investments look after GARS The team managing GARS Strategists Risk experts Investment managers The GARS team is split into three groups. These groups work closely together to choose the right investments for GARS. Strategists The job of the strategists is to give advice on big picture world developments that might affect our investment decisions (for instance, how unrest in the Middle East might affect the price of oil). Investment managers The investment managers find their ideas from many different sources; for instance, from the findings of the strategists or from our equity, bond and currency experts. as possible. * Source: Standard Life Investments 30 September /12 Global Absolute Return Strategies Fund The investment managers thoroughly analyse each idea before they consider it for GARS. They use their own tried and tested methods to help them find good investments. They continually check the investments they already hold, to make sure each one is still suitable for GARS. Investment risk experts The aim of the risk experts is to ensure that the investments choosen for GARS give you as smooth an investment journey

7 4 reasons to consider GARS GARS aims to make money in all market conditions GARS uses a wide range of investment tools and techniques. The managers can use these carefully and skilfully to help make money even if markets are falling. Increased diversification By putting your money in a lot of different markets and types of investment the risk is spread much further. In otherwords, GARS puts your eggs in many different baskets. Easy access GARS is priced daily so you can buy, sell or switch units on the same basis as for any fund. 4 An asset manager you can trust Standard Life Investments is a leading asset manager, managing 352 billion^ on behalf of clients worldwide. A team of over 40 skilled investment professionals takes care of your investment in GARS. For more on Standard Life Investments see page 9 ^ Source: Standard Life Investments 30 June 2015 Global Absolute Return Strategies Fund 07/12

8 Why choose Standard Life? Standard Life is a leading long-term savings and investments company with around 4.5 million customers, trusting us to manage over 425 billion* of their assets everyday. Established in Scotland in 1825 and headquartered in Edinburgh, it s one of the biggest companies listed on the London stockexchange. Here in Ireland, the company has been operating since 1834 and has been helping generations of Irish customers plan for their future. * As at 30 June 2015 Your policy is protected Standard Life in Ireland operates as a branch of our UK parent company. This means that any policies taken out since 1 December 2001 are covered by the UK s Financial Services Compensation Scheme (FSCS) in the event that Standard Life is in default. So if you invest in a Standard Life pension or investment policy, 100% of the claim is covered, with no upper limit. There is no equivalent Irish compensation scheme. For information on FSCS cover, see Your policy is protected (FSCSFAQ). 08/12 Global Absolute Return Strategies Fund

9 About Standard Life Investments Strong and market leading Standard Life Investments is a leading asset manager, who manage 352 billion* on behalf of clients worldwide. Talented people At the heart of their success is over 1,500* investment professionals and support staff working for them around the world. They spend a lot of time and energy recruiting and keeping the best and most talented people. * As at 30 June 2015 Taking care of your money They thoroughly research and analyse each investment idea before they add it to any of our funds. They use their own tried and tested methods to do this. Their aim is to constantly look ahead to anticipate change, so that they can deliver the best rewards for our investors. Global reach Their headquarters are in Edinburgh and they have offices in Boston, Hong Kong, London, Beijing, Sydney, Dublin, Paris and Seoul. They also have close links with leading investment companies in India and Japan. A decision to invest should not be based on the information within this document. Please talk to your financial adviser for more information, or if you need an explanation of the terms used. For the latest performance of GARS, please see the GARS Fund factsheet (FFS_OJ). Global Absolute Return Strategies Fund 09/12

10 Important things to consider * As measured by the six month European Interbank Offer Rate (Euribor) This Fund is not guaranteed, not a capital protected product and not a substitute for cash or deposits. The Fund can invest in a wide variety of investment strategies and assets. Below we document the specific or heightened risks applicable to this fund rather than an exhaustive list. Extensive use of derivatives In order to achieve its objectives an absolute return fund utilises a combination of traditional investments (such as equities, bonds and foreign exchange) and advanced techniques where it can use derivatives extensively. Derivatives are financial instruments which derive their value from an underlying asset, such as a share or bond, and are used routinely in global financial markets. Used carefully, derivatives offer an effective and cost-efficient way of investing in markets. However, derivatives can lead to increased volatility of returns in a fund, thus requiring a robust and extensive risk management process. While the Fund will not borrow cash for investment purposes, the total value of exposures to markets will routinely exceed the Fund s net asset value. Derivatives may be Exchange Traded or Over the Counter (OTC). Counterparty risk The Investment Manager may use one or more separate counterparties to undertake derivative transactions on behalf of the Fund. From time to time the fund may be required to pledge collateral, and when this is required it will be paid from within the assets of the Fund. When a derivatives contract moves in favour of the Fund there is a risk that the counterparty may wholly or partially fail to honour their contractual obligations under the arrangement. The Investment Manager assesses the creditworthiness of counterparties as part of the risk management process and will ordinarily hold collateral to mitigate this. Use of short and long positions The Fund, by employing certain derivative techniques, will establish both long and short positions in individual stocks and markets. Investing on a long basis means that the value of the derivative will rise or fall in the same direction as the underlying market value of the asset from which it is derived. 10/12 Global Absolute Return Strategies Fund

11 If investments are made on a short basis the value of the derivative will rise and fall in the opposite direction to the underlying market value of the asset from which it is derived. Active Fund Management The majority of risks within traditional funds are driven by the type of investments held (equities, fixed interest or property, etc). The risks that fund management decisions add are generally of a smaller magnitude than those of the asset types themselves. However, the GARS fund doesn t have a structure where most of the returns are generated from traditional asset types. Rather, it derives most of its returns from very specific strategies. As a result of this the risks of the fund are driven primarily by these fund management decisions, and less by the characteristics of the underlying traditional asset types. Correlation The fund will invest in a diverse set of investment strategies, which in the opinion of the investment adviser have attractive risk reward characteristics. While the breadth of the strategies is significant, should they start to exhibit closer correlation for example, move in the same direction as one another, the fund may be subject to a higher level of risk and volatility than anticipated. You should consider GARS if you: wish to invest in a fund that aims to provide positive investment returns in all market conditions wish to invest in a fund which has a target return of cash* +5% per annum (gross of charges) over rolling three year periods are looking to form the core element of a portfolio or diversify an existing portfolio However, GARS is not suitable if you: do not wish to take any risk with your capital have a short term investment time horizon do not wish to invest in a fund that uses financial derivatives or the advanced investment strategies used by GARS Global Absolute Return Strategies Fund 11/12

12 Pensions Savings Investments Find out more Talk to your financial adviser they ll give you the information you need. Also, you can call us or visit our website (01) Mon-Fri, 9am to 5pm. Call may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary. facebook.com/standardlifeireland youtube.com/standardlifeireland Standard Life Assurance Limited is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Standard Life Assurance Limited is registered in Dublin, Ireland (905495) at 90 St Stephen s Green, Dublin 2 and Edinburgh, Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. GARSCUST V Standard Life, images reproduced under licence