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Flexible Income Annuity

Fund closures

Scottish Friendly has an ongoing commitment to monitor investment funds where customers hold monies. Some of the funds available to Flexible Income Annuity policyholders now have small amounts invested or are not performing to expectations. Consequently Scottish Friendly have taken the decision to close a number of funds and provide replacements in line with the policy terms and conditions.

The replacement funds chosen have equivalent levels of risk to the fund being replaced, e.g. adventurous, balanced or cautious. The replacement funds are passively-managed which means they aim to track the performance of a range of worldwide investment indices (FTSE All Share for example) with the risk level determined by the amount invested in different tracker funds. Broadly, equities are riskier than bonds or cash and therefore a fund with a higher allocation of equities (such as the adventurous fund) will have a higher level of risk, but with higher potential return.

The funds are managed by Canada Life Investments to determine an appropriate allocation into different investment markets and types of asset for each passive fund, and especially the balance between equities, company bonds, government bonds and cash. The index trackers are managed by Vanguard who are respected worldwide for their passive fund management, its investors trusting them to manage $4 5.1 trillion (at 31.1.19) of their assets.

Policyholders affected by the fund closures will receive a letter providing further detail.

The list of funds being closed, their replacements and fund closure dates are listed below:

Existing fund name Replacement fund name Closure date

MGM Investec Cautious Managed Fund

CanLife FIA Cautious Passive Fund (formerly MGM Cautious Passive Fund)

21 June 2019

MGM IFDS Omnis Threadneedle Balanced

CanLife FIA Balanced Passive Fund (formerly MGM Balanced Passive Fund)

21 June 2019

MGM Newton Balanced Fund

CanLife FIA Balanced Passive Fund (formerly MGM Balanced Passive Fund)

28 June 2019

MGM IFDS Omnis Balanced

CanLife FIA Balanced Passive Fund (formerly MGM Balanced Passive Fund)

21 June 2019

MGM IFDS Omnis Cautious

CanLife FIA Cautious Passive Fund (formerly MGM Cautious Passive Fund)

21 June 2019

MGM IFDS Omnis Threadneedle Advanced

CanLife FIA Adventurous Passive Fund (formerly MGM Balanced Passive Fund)

21 June 2019

MGM IFDS Omnis Threadneedle Cautious

CanLife FIA Cautious Passive Fund (formerly MGM Cautious Passive Fund)

21 June 2019

MGM IM Verbatim Portfolio 3

CanLife FIA Cautious Passive Fund (formerly MGM Cautious Passive Fund)

21 June 2019

MGM IM Verbatim Portfolio 4

CanLife FIA Cautious Passive Fund (formerly MGM Cautious Passive Fund)

21 June 2019

MGM IM Verbatim Portfolio 5 Growth

CanLife FIA Balanced Passive Fund (formerly MGM BalancedPassive Fund)

21 June 2019

MGM IM Verbatim Portfolio 6

CanLife FIA Balanced Passive Fund (formerly MGM BalancedPassive Fund)

21 June 2019

MGM IM Verbatim Portfolio 7

CanLife FIA Adventurous Passive Fund (formerly MGM Balanced Passive Fund)

21 June 2019

The full range of funds available to FIA policyholders can be found in the table below:

  Fund name Fund manager Objective Risk AMC Factsheet link
Passive fund
CanLife FIA Adventurous Passive Fund (Formerly MGM Adventurous Passive Fund) Vanguard To achieve long-term capital growth by managing the asset allocation of a portfolio of predominantly UK and overseas equities. Adventurous

0.30%

PDF

Passive fund

CanLife FIA Balanced Passive Fund (Formerly MGM Balanced Passive Fund) Vanguard To achieve a combination of capital growth and capital preservation by managing the asset allocation of a portfolio of predominantly equities and fixed income. Balanced
0.25%

PDF

 

Passive fund

CanLife FIA Cautious Passive Fund (Formerly MGM Cautious Passive Fund) Vanguard To achieve capital preservation with some opportunity for growth in the medium term by managing the asset allocation of a portfolio of predominantly fixed income and cash with some equities. Cautious

0.20%

PDF

Active fund

CanLife FIA Jupiter Merlin Growth Portfolio Fund (Formerly MGM Jupiter Merlin Growth Fund) Juniper Asset Management To achieve capital growth over the longer term by investing predominantly in unit trusts, OEICs, exchange-traded funds and other collective investment schemes across several management groups. Adventurous
1.50% (0.75% after AMC rebate)

PDF

Active fund

CanLife FIA AXA Framlington Balanced Managed Fund AXA Framlington The fund aims to achieve capital growth through investment in a broad range of securities in all or any economic sectors in all or any parts of the world which, in the Manager’s opinion, show above average profitability, management quality and growth, balancing risk and return for investors. Balanced

0.65%

PDF

Active fund

CanLife FIA Investec Multi-Asset Protector Fund (Formerly MGM Investec Multi-Asset Protector Fund)

Investec Asset Management The fund aims to provide capital growth from a multi-asset portfolio and to deliver protection at 80% of the investment’s highest price to date, however this is not guaranteed. The fund invests in UK and global equities, bonds, property, commodities, cash and alternatives. Cautious
0.80%

PDF

Active fund
CanLife FIA Insight Liquidity Fund (Formerly MGM Insight Liquidity Insight To achieve stability of capital and daily liquidity with an income which is comparable to Sterling denominated short dated money market interest rates. Defensive

0.25% (0.1% after AMC rebate)

PDF

If you’d like to switch into the replacement fund or any other FIA fund, please complete and return and fund switching form found here.
 

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