In October, our Insured Investment Committee, in consultation with Mercer Investment Consulting, agreed to proposals by UBS to make changes to the above fund on 23 November. We believe these changes are a positive move.
What’s changing?
- The way the fund is managed. UBS will now use its ‘global allocation model’, which it’s used successfully for over 25 years with other funds in its range. It’s similar to the current model but more flexible and responsive to changing market conditions.
- The asset allocation of the fund. In addition to equities, bonds and cash, the fund will now invest in collective investment schemes (other diversified funds managed by UBS) and derivatives to reduce risk. That means while the fund will continue to focus on delivering good performance it will aim to be less risky than at present.
What’s staying the same?
- UBS will still use the same trademark value investment style.
- The fund is still a balanced managed fund and will still meet the stringent limits of the Association of British Insurers’ balanced managed classification.
- The new team managing the fund will have access to the same experienced specialists as before.
- The additional yearly charge for the fund will stay the same. However, there’ll be a one-off cost when the change is made that comes from realigning the portfolio. The most this is expected to be is 0.15% of the fund that will be taken in to account in the fund price.
What are the benefits of the new structure?
- Increased global diversification
- More active use of derivatives
- Active management of foreign currencies
- Improved risk/return profile
- Access to 25 years’ experience with the underlying model
More details
If you're currently invested in the Scottish Equitable UBS Balanced Managed fund you don't need to do anything if you don't want to. If you do, please talk to your financial adviser. We’ve told them that we’ve written to you. We can’t give you financial advice, but feel free to call our helpdesk on 0845 10 00 10 if you need more information.
