Performance fees are paid to reward outperformance. They only apply when the manager has performed above an agreed benchmark or hurdle rate and so the payment of a performance fee is an indication of how successful the fund is.
We review the disclosable charges every quarter to take account of current performance fees. We’ll communicate any changes through Fund updates to make sure you’re kept as up to date as possible.
- Absolute Return Select Portfolio
- Cautious Select Portfolio
- Scottish Equitable Absolute Insight UK Equity Market Neutral
- Scottish Equitable BlackRock UK Absolute Alpha
- Scottish Equitable Cazenove UK Absolute Target
- Scottish Equitable Gartmore UK Absolute Return
- Scottish Equitable GLG UK Select
- Scottish Equitable Sarasin EquiSar IIID
Absolute Return Select Portfolio
This fund contains a number of underlying funds where a performance fee applies. Currently, these are:
- the Scottish Equitable BlackRock UK Absolute Alpha fund
- the Scottish Equitable Absolute Insight UK Equity Market Neutral fund
- the Scottish Equitable Cazenove UK Absolute Target fund
- the Scottish Equitable Gartmore UK Absolute Return fund, and
- the Scottish Equitable Sarasin EquiSar IIID fund
This means the additional charges/expenses for the Absolute Return Select Portfolio and the Cautious Select Portfolio will rise and fall depending on performance day to day – so the charge you pay may vary significantly from the figure quoted in our factsheets and other literature, which is based on recent past performance.
In the case of the Cautious and Absolute Return Select Portfolios, the performance fees for all funds in the portfolio to which a performance fee applies will be added together to calculate the total fee payable.
Details of how the performance fee is calculated for each of the underlying funds named above can be found below.
Scottish Equitable Absolute Insight UK Equity Market Neutral fund
Insight may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 10% of any growth above its target growth rate† and only when the price is higher than it was when a performance fee was last paid. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each year any accrued performance fee will be taken from the fund and paid to Insight, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge.
†The target growth rate is Sterling 3-month LIBID.
Scottish Equitable BlackRock UK Absolute Alpha
BlackRock may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 20% of any growth above its target growth rate† and only when the price is higher than it was when a performance fee was last paid. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each calendar quarter any accrued performance fee will be taken from the fund and paid to BlackRock, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge.
†The target growth rate is Sterling 3-month LIBOR at the last quarter end.
Scottish Equitable Cazenove UK Absolute Target fund
Cazenove may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 20% of any growth above the price when a performance fee was last paid. For each day when performance is positive, an accrual is made, and on each day when it's negative, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each calendar quarter, an accrued performance fee will be taken from the fund and paid to Cazenove, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charges.
Scottish Equitable Gartmore UK Absolute Return fund
Gartmore may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, and only when the price is higher than it was when a performance fee was last paid, an accrual is made, and on each day when it’s below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each three months (ending February, May, August and November) any accrued performance fee will be taken from the fund and paid to Gartmore, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can’t determine the specific charges payable in advance – they could be significantly more than the disclosed charge.
†The target growth rate is the UK Base Rate.
Scottish Equitable GLG UK Select fund
GLG may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each six-month period, any accrued performance fee will be taken from the fund and paid to GLG, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance – they could be significantly more than the disclosed charge.
†The target growth rate is the FTSE All-Share Total Return Index.
Scottish Equitable Sarasin Equisar IIID fund
Sarasin may be entitled to a performance fee in addition to the annual management charge.
The performance fee represents 20% of any growth above its target growth rate†. For each day when performance is above the target growth rate, an accrual is made, and on each day when it's below the target growth rate, any accrual is reduced. The accrual will be taken into account in the calculation of the daily unit price. At the end of each year, any accrued performance fee will be taken from the fund and paid to Sarasin, and won’t be refundable in the event of subsequent performance below the target growth rate.
As a result of the performance fee, we can't determine the specific charges payable in advance - they could be significantly more than the disclosed charge.
†The target growth rate is the Retail Price Index +3.5%