Fund changes

Here you can keep up to date, and find everything you need to know about changes to our funds. This could be, for example, a change to a fund’s objective, risk rating or charges; or a change to the investment adviser, the fund’s name or underlying investment approach.

What’s changing?

We regularly review and adapt our pension funds as the market environment and our longer-term outlook changes, and as we see new opportunities for customers emerging.

It’s clear the investment outlook is shifting, exacerbated by the Covid-19 impact, and we expect lower projected returns and potentially continued volatility. So we’re introducing a number of asset allocation changes to the Scottish Widows Pension Portfolio Funds and Scottish Widows Retirement Portfolio Funds which we believe will mean they’re better equipped to overcome these challenges.


Funds the changes apply to

  • SW Pension Portfolio 1
  • SW Pension Portfolio 2
  • SW Pension Portfolio 3
  • SW Pension Portfolio 4
  • SW Pension Portfolio A
  • SW Pension Portfolio B
  • SW Pension Portfolio C
  • SW Retirement Portfolio 10-40
  • SW Retirement Portfolio 30-60
  • SW Retirement Portfolio 50-80
  • SW Retirement Portfolio 70-100

We believe asset allocation has the biggest impact on the long-term performance of multi-asset funds. It involves dividing a fund’s investments among different asset categories, such as equities (also known as shares), bonds, property etc. Our asset allocation team is responsible for selecting the assets we use and combining them into what they determine is the most effective blend. They also decide on the allocations between different market segments (e.g. US equities versus Emerging Market equities).

The asset allocation changes we’re introducing represent our longer-term view of the potential returns from different asset types over the lifetime of our funds. We’re aiming to deliver improved investment returns for the same level of risk and at no additional charge by:

  • Introducing a new asset allocation approach for equities
  • Diversifying the investments in the funds into a wider range of asset types
  • Introducing currency hedging on a portion of our overseas equities
  • Integrating environmental, social and governance (ESG) considerations

We’ve worked hard with our fund manager partners to ensure we can make these enhancements without any increase in charge to customers. The changes will be implemented in phases (from early Q3 2020) and will be completed by Q4 2020.


Introducing a new asset allocation approach for equities

In common with many pension providers, our funds currently hold a significant proportion in UK equities – often called a “home bias”.  It has generally been the view that investors may feel more comfortable about their home market and be more optimistic about their domestic economy.

As a result, we’ve a higher concentration in UK equities than an index such as the MSCI World Index. This type of index is comprised of the largest companies by the value of their shares or “market-cap”. This means countries like the UK will have a lower weighting in the index because it has fewer big companies in terms of the value of their shares, and a high weighting in regions like the US which has some of the world’s biggest companies by share value.

We’ve taken steps to gradually reduce the UK equity exposure in our funds over the years and our Pension Portfolio Funds and Retirement Portfolio Funds currently have just under 30% of their equity allocation in UK equities. We now consider a further reduction to around 20% achieves an appropriate balance between our customers’ preference to be ‘overweight’ to their home market and a global market cap weight.

In addition, we are amending our approach to overseas equities weightings. We currently allocate to overseas markets purely on the basis of expected contribution to risk and return. As such, our funds deviate significantly from a market-cap benchmark. Our starting point will be to allocate regional weights on a pro-rata market-cap (ex-UK) basis and adjust from that position based on our long-term return assumptions for each region.


Diversifying the investments in the funds into a wider range of asset types

Our latest review tested how a change in our asset allocation could affect future returns in a broad range of investment scenarios under different potential future economic and market conditions. Our asset allocation team considered the full range of available asset classes, then refined the list to those we believed could add most value for the same level of risk. This testing has resulted in the inclusion of the following new asset classes:

  • An allocation to Emerging Market Government Debt (EMGD). These are bonds issued by governments in emerging market countries (those with developing economies) in both US dollars and local currencies. The investment case for EMGD can include higher yield and potentially higher income, as well as adding a diversification benefit.
  • An allocation to Global Real Estate Investment Trusts (REITs). REITs are publicly-traded companies that own, operate or develop income-producing property, such as apartment buildings or shopping centres, which generate rent. This asset class is something of a hybrid of property and equities, offering the benefit of exposure to the property sector, with the liquidity of equities. REITs act as a diversifier and often generate reliable income.
  • A small allocation to Cash improved the risk characteristics of the portfolios without having a material impact on potential growth, as well as increasing liquidity.

Introducing currency hedging on a portion of our overseas equities

Currency movements can play a substantial role in the returns of a multi-asset portfolio. Foreign currency ‘hedging’ tries to reduce the risk that arises from future adverse movements in an exchange rate between Sterling and a foreign currency. The global bonds in our Pension Portfolio and Retirement Portfolio funds are already hedged to sterling. We will now be adding currency hedging for around 50% of our overseas developed market equity exposure to help optimise returns in flat or more volatile markets. This provides an overall reduction in risk, which means we can achieve greater diversification with the other asset classes.


Integrating environmental, social and governance (ESG) considerations

As environmental, social and governance (ESG) risks and opportunities become better researched and understood, it is clear that these factors can have a financial impact on investment portfolios. Our customers look to us to exercise our judgement on the most appropriate way of investing over the long term. So where we believe ESG factors pose risks to their investments, or offer potential opportunities, we will incorporate them into our decision-making.

We have introduced a Responsible Investment and Stewardship Framework that governs our decisions on asset allocation, manager selection, fund research and engagement activity. This framework defines how we invest responsibly for our customers to help secure their long-term financial futures.

We have identified an opportunity to take a first step and enhance our funds by supporting the transition to a low-carbon economy. We will be backing businesses that decrease carbon emissions, increase clean technology revenue, reduce water consumption and improve waste management. We will be updating our website with further information on how we will go about this in our Pension Portfolio Funds and Retirement Portfolio Funds.

We’ve restricted trading in our life and pension property funds.

The extraordinary events of Covid-19 are having an impact on the property market as surveyors aren’t able to accurately value properties. This has resulted in fund managers suspending dealing in their property funds to protect customers’ interests.

Our life and pension property funds invest in some of these suspended funds so we’ve had to restrict withdrawals from, and payments into, our property funds.

We’re writing to all affected customers. Our other funds are not affected by these restrictions.

What this means for customers

Making withdrawals

We’re deferring withdrawals from our life and pension property funds, apart from those listed below. That means withdrawals will be deferred until the fund restrictions are lifted, or from 6 months of receipt of the instructions (from 12 months for policies beginning with ‘ZU’), whichever is sooner.

The exceptions to this are:

  • Critical illness claims
  • Maturities
  • Death claims
  • Retirement claims
  • Income withdrawals from ‘drawdown’ plans
  • Annuity payments (from investment-linked annuities)

Paying in

Pensions (except Retirement Account and policies beginning with ‘ZU’) and life products

  • Any regular contributions which are currently being invested in our life and pension property funds will continue to be invested in those funds
  • The managers of the suspended property funds will continue to calculate an indicative fund value and provide us with daily prices for their funds. These will be used to calculate a price for the Scottish Widows life and pension property funds, which will then be reflected in the investment of any ongoing regular contributions.
  • We’re not accepting new instructions to set up regular payments, increases to existing regular payments, or single payments into our life and pension property funds. If we receive any such requests, we’ll ask customers to choose an alternative fund or we’ll refund the payment(s). The exception is our lifestyle strategies where investments will continue to be automatically switched into the property funds where applicable.
  • Any pension transfer requests into the affected funds will be rejected.

Retirement Account

For Retirement Account customers, any regular, single or transfer payments to be invested into our pension property funds will be redirected to the Control Account.

Policies beginning with ‘ZU’

Regular, single and transfer payments into our pension property funds will be redirected to an alternative fund or account depending on the type of policy:

  • Group Self Invested Personal Pension (GSIPP)
    Payments will be redirected to a cash account until we’re instructed otherwise by the customer or their adviser.
  • Group Stakeholder Plan (GSP)
    Payments will be redirected to a money market fund until we’re instructed otherwise by the customer or their adviser.
  • Master Trust
    Payments will be redirected to the scheme’s default lifestyle, as instructed by the Master Trust’s scheme trustees.
  • Occupational Money Purchase (OMP) and Mercer Master Trust
    Payments will be redirected to a fund selected by the scheme’s trustees.

Automatic rebalancing in lifestyle strategies that invest in the affected property funds will be suspended until normal trading resumes.

Control Account, cash accounts and money market funds

These options are not designed to be used as long-term investments. It’s important for customers to consider reinvesting payments redirected to these investment options in another investment fund or funds.

How long will the trading restrictions last?

The managers of the suspended property funds aim to lift the suspensions when normal market conditions return. Once this happens, we’ll remove our restrictions and reinstate normal trading in our life and pension property funds. We’ll write to all affected customers to let them know.

Japan’s financial markets close on various days throughout the year to mark national holidays. In May, the holidays fall on 3 consecutive days from 4th to 6th May 2020.

What this means for customers

OEICs and ISAs

Our three Japanese OEIC funds, which invest exclusively in Japanese equities, will be unavailable for trading on these dates. These funds are:

  • Halifax Japanese Fund
  • Scottish Widows Japan Growth Fund
  • Scottish Widows Japan Equity Fund

Any investors in these OEICs, including those invested via an ISA, who want to buy or sell ahead of the market closure should submit their instructions before the following cut off points:

Fund Name Time/ Date for Client Instruction to be accepted

Halifax Japanese Fund

11:59hrs Friday 1st May 2020

Scottish Widows Japan Growth

17:00hrs Thursday 30th April 2020

Scottish Widows Japan Equity Fund

17:00hrs Thursday 30th April 2020

Regular Payments

Any regular payments that would normally be invested into the impacted OEIC funds will be processed after the Japanese markets are re-opened.

Other OEIC funds with some exposure to Japanese equities

Customers investing in other OEICs that are not 100% invested in Japanese shares will continue to be able to buy and sell shares in the funds as usual while the markets are closed.

Life and pension investments

Our life and pension customers will be able to transact normally throughout the period, including in funds that invest exclusively in Japanese shares. For these funds, prices will be published as normal.

If your Retirement Account is invested in one or more of the suspended funds through the Retirement Account Fund Supermarket, you won’t be able to buy or sell shares in these funds, including switches between funds, during the suspension period. If you are making regular investments in these funds, these will be redirected to your Control Account. Money held in the Control Account does not currently earn any interest, so you should consider how these amounts should be invested, and may wish to take financial advice.

If you are invested in a fund that’s suspended, we’ll write to you and where possible contact your adviser when the suspension ends. We will also post updates on this page.

These are the Fund Supermarket funds currently suspended:

Fund Date of Suspension

Kames Property Income Feeder Acc

17/03/2020

Kames Property Income Feeder Inc

17/03/2020

Janus Henderson UK Prop PAIF Feeder I Inc

17/03/2020

Janus Henderson UK Prop PAIF Feeder I Acc

17/03/2020

Commercial Lg Inc Feeder Trust I Net Acc

17/03/2020

Commercial Lg Inc Feeder Trust J Net Inc

17/03/2020

Aviva Investors UK Property Feeder 2 Acc

18/03/2020

Aviva Investors UK Property Feeder 2 Inc

18/03/2020

Aberdeen UK Property Feeder UT I AC NAV

18/03/2020

Aberdeen UK Property Feeder UT I INC

18/03/2020

SLI UK Real Estate Feeder Institutnl Acc

18/03/2020

SLI UK Real Estate Feeder P1 Acc

18/03/2020

SLI UK Real Estate Feeder P1 Inc

18/03/2020

SLI UK Real Estate Platform One Acc

18/03/2020

Legal & General UK Property Feeder I Acc

18/03/2020

Legal & General UK Property Feeder I Inc

18/03/2020

Threadneedle UK Prop Aut Tr Feeder 2 Acc

18/03/2020

Threadneedle UK Prop Aut Tr Feeder 2 Inc

18/03/2020

BMO Property Growth & Income I Acc

18/03/2020

BMO Property Growth & Income I Inc

18/03/2020

BMO UK Property Feeder 2 Acc

18/03/2020

BMO UK Property Feeder 2 Inc

18/03/2020

ASI Glbl Rl Est Fd P 1 Acc GBP Unhedged

18/03/2020

ASI Glbl Rl Est Fd P 1 Inc GBP Unhedged

18/03/2020

Q&As

We’ve answered questions you may have about this change.

Read more

Scottish Widows has taken the decision to temporarily suspend all dealing in the following Funds with effect from 12 noon on 17th March 2020:

  • HBOS UK Property Fund
  • Scottish Widows Pooled Property ACS Fund 1
  • Scottish Widows Pooled Property ACS Fund 2

These Funds are available for investment by Scottish Widows life and pension customers. We will issue more information about how these customers are affected as soon as this is available.

The decision has been made to safeguard the interests of customers and has been agreed with the Funds’ depositaries.

Suspension of dealing means we cannot buy, sell, transfer, switch or exchange shares in the Funds until further notice.

To calculate the daily share price of the Funds, the properties owned by the Funds are regularly valued by a Standing Independent Valuer using recognised professional valuation standards. Markets around the world have experienced huge disruption as COVID-19 spreads and trading in the UK property market is being severely impacted. As a result the Funds’ Standing Independent Valuers have informed Aberdeen Standard Investors (ASI), the Investment Advisers to the Funds, that it is not currently possible to provide accurate and reliable valuations for the properties held in the Funds.

It has, therefore, not been possible to produce a price for the Funds which we can say with any confidence reflects the true value of the assets. 

To protect the interests of customers, we have suspended dealing in the Funds.

This action reflects the exceptional circumstances in the UK property market and the need to protect customer interests by suspending trading when there is material uncertainty regarding how the assets should be valued. We will aim to lift the suspension as soon as confidence returns to the market and there is more certainty regarding asset valuations, taking into account the best interests of customers.

Various fund managers have announced they are temporarily suspending trading in their property funds because of valuation uncertainty related to the impact of the Coronavirus outbreak. This means we will be unable to buy and sell shares in these funds, during the suspension period.

The following property funds are currently suspended:

  • M&G Property
  • Kames Property Fund
  • L&G UK Property Funds and Feeder Funds
  • Standard Life Investments UK Real Estate Fund
  • Aviva Investors Property Fund
  • Janus Henderson UK Property Fund
  • Aberdeen UK Property Fund
  • Threadneedle UK Property

Some of our plans invest in these funds, and we’re currently considering what action to take in response. We’ll provide an update here shortly. We’re also considering the position for our own Scottish Widows Property Funds and will post updates here when we can.

If you are invested in one of the suspended funds through the Retirement Account Fund Supermarket, you won’t be able to buy or sell shares in these funds, including switches between funds, during the suspension period. If you are making regular investments in these funds, these will be redirected to your Control Account. You should consider how these amounts should be invested, and may wish to take financial advice.

Neil Woodford’s flagship Woodford Equity Income Fund is being wound up. The first tranche of the wind-up proceeds has now been paid out, and the rest of the assets will be sold in further tranches over the coming months. Some Scottish Widows life and pensions customers are invested in this fund through the SW Woodford Equity Income Funds.

We’ve reinvested the amount paid to us on customers’ behalf into the Royal London UK Equity Income Fund, as we previously outlined we would do. We’ve chosen this fund because it also invests in UK company shares, is similar to the closing fund and has lower charges.

This means customers in the SW Woodford Equity Income Fund are temporarily partly invested in the Woodford Equity Income Fund, and partly in the Royal London UK Equity Income Fund.

Each future tranche of cash returned from the former Woodford Equity Income Fund will also be reinvested in the Royal London UK Equity Income Fund until all wind up proceeds from Woodford’s administrators have been received.

At that point we’ll close the SW Woodford Equity Income Fund and switch customers in this fund into the SW Royal London UK Equity Income Fund, free of charge.

We continue to allow customers to switch out of the SW Woodford Equity Income Fund, free of charge, to any other fund in our range. We believe this could remove any uncertainty for customers. Customers should speak to a financial adviser if they are unsure what to do.

Please read The Scottish Widows Pension Funds Investor’s Guide for full details of the Scottish Widows Pension Fund range.

Please read The Scottish Widows Life Funds Investor’s Guide for full details of the Scottish Widows Life Fund range.

We’re making changes to our Balanced, Cautious, Opportunities and Progressive Portfolio Funds. From 28th February 2020:

  • Schroders Investment Management (Schroders) will take over from Aberdeen Asset Investments Limited as the Funds’ Investment Adviser.
  • Scottish Widows Unit Trust Managers Limited (SWUTM) will replace Russell Investments Limited in determining which type and percentage of asset classes the Funds invest in over the medium to long term.
  • Schroders will select the Funds’ underlying multi-manager funds, and they may make short-term asset class changes when appropriate.
  • For the Balanced Portfolio Fund we’ll change the Investment Association sector that’s used to measure the Fund’s performance*.

We expect Schroders to make changes to some of the underlying funds, to reflect their market views and economic forecasts. This will result in a short term increase in transaction costs to the Funds, but we believe these changes will benefit the Funds over the longer term.

We are writing to all affected customers, explaining that if they believe these Funds still meet their investment needs they don’t need to do anything. The changes don’t alter the risk profile or the ongoing charges of the Funds, such as the annual management charges. We’re updating all the Funds’ investment policies to clarify these new roles and responsibilities. We have also updated the investment objective of the Balanced Portfolio Fund to incorporate a minor amendment to clarify the objective of this Fund.

For more on the background to our change of Investment Adviser, along with information on transaction costs and a detailed Q&A, please see our August announcement below: ‘New Investment Advisers of our OEIC and ISA Funds’.

* Investment Association sectors group funds with broadly similar characteristics to compare performance. More information can be found at www.theinvestmentassociation.org/fund-sectors

What changed in 2019

We’re changing the Investment Adviser for the Scottish Widows High Reserve OEIC Fund. Schroders Investment Management (Schroders) will take over from Aberdeen Asset Investments Limited on 28th February 2020.

With the change of Investment Adviser, the Fund’s annual income target will change. This is so that bonds and shares can be measured separately to better reflect returns that might be available from these different types of asset in the Fund. We’re updating the Fund’s investment objective to show this and also clarifying roles and responsibilities.

We expect the new Investment Adviser to change some of the individual assets currently held within the Fund to reflect their views, economic forecasts and the market. This will result in a short-term increase in transaction costs to the Fund, however we believe these changes will benefit the Fund over the longer term.

We are writing to all affected customers, explaining that if they believe the Fund still meets their investment needs they don’t need to do anything. The changes don’t alter the risk profile or the ongoing charges of the Fund, such as the annual management charge.

How is the income target changing?

We are changing the income target so that it’s better aligned to the Fund’s assets, which are mainly equities (or shares) and fixed interest bonds.

The current target aims ‘to deliver performance in excess of 110% of the dividend yield of the FTSE All Share Index each year before deduction of fees’. The FTSE ALL Share Index is purely for equities, so does not include any bonds.

The income target from 28th February 2020 will change to:

‘The Fund is actively managed by the Investment Adviser who chooses investments which, collectively, aim to provide an income return in excess of 110% of the Benchmark income yield, each year before deduction of fees. The Benchmark income yield is based on 75% of the FTSE All Share Index dividend yield and 25% of the yield of the iBOXX Sterling Corporate and Collateralised Index. Index Yields are calculated by totaling the annual income paid and dividing it by the respective total value of each index.’

The key change is including the yield of the iBOXX Sterling Corporate and Collateralised Index as 25% of the benchmark. This iBOXX index is a bond index, so now the overall benchmark is a mix of bond and equity yields, which is a more accurate reflection of the Fund’s asset mix.

As an indication, the forecast annual income target based on the current ‘FTSE All Share only’ target during September 2019 was 4.73%, whereas under the new combined target it would have been 4.56%. Please note that these figures are purely for illustrative purposes and don’t indicate any future income target.

Further information

For more on the background to our change of Investment Adviser, along with information on transaction costs and a detailed Q&A, please see our August announcement below: ‘New Investment Advisers of our OEIC and ISA Funds’.

It was announced on Tuesday 15th October that Neil Woodford’s flagship Woodford Equity Income Fund will be wound up, with the assets sold over an extended period of time from January 2020. Some Scottish Widows life and pensions customers are invested in the fund through the SW Woodford Equity Income Funds.

In light of these developments, the SW Woodford Equity Income Life and Pension Funds are now closed to new investments, and we plan to fully close the funds when the Woodford Equity Income Fund is wound up and the administrator pays out the proceeds.

We’re writing to all customers invested in the SW Woodford Equity Income Funds, offering them the option to switch into an alternative fund from our fund range. We believe this can help to remove any uncertainty for our customers.

The Woodford Equity Income Fund continues to price daily, and these prices will be reflected in the prices of the SW Woodford Equity Income Fund. As with all investments, prices can rise as well as fall and there is the potential for it to be worth less than the original investment.

If customers don’t select an alternative fund, when the Woodford Equity Income Fund closes we’ll reinvest the amount paid to us on their behalf into the SW Royal London UK Equity Income Fund, which we’ve chosen because it also invests in UK company shares, is similar to the closing fund and has lower charges.

Any regular payments being made into the SW Woodford Equity Income Fund will be paid into the SW Royal London UK Equity Income Fund from 25th October 2019, unless or until customers give us an alternative instruction.  We’re asking all affected customers who are making regular payments to review the SW Royal London UK Equity Income Fund to determine whether it’s suitable for their investment needs. If they prefer, they can select a different fund from our fund range.

We are adopting a different approach for a small number of customers who are already invested in the maximum number of funds for their plan. For these customers, any future regular payments into the SW Woodford Equity Income Fund will be invested proportionally across the other funds they have chosen. Customers can change how they invest their regular premiums at any time.

If there are any further developments we will update this page as soon as possible.

Please read this guide for full details of the Scottish Widows Pension Fund range.
Please read this guide for full details of the Scottish Widows Life Fund range.

We’re replacing Aberdeen as the Investment Manager of most of our funds. Our actively managed funds, where the Investment Manager seeks to add value by making decisions on which investments to buy, sell or hold will move to Schroders, with the exception of the HBOS Ethical OEIC (including the Clerical Medical Ethical, Clerical Medical Evergreen and Halifax Ethical life and pension funds which invest in the OEIC), which will move to Hermes Investment Management.

We believe these appointments will benefit you through the prospect of improved future performance. The funds will continue to be managed within their existing risk profile.

The new Investment Managers will take on the relevant funds over a period of time from the end of September 2019. Aberdeen will continue to manage our property and tracker funds until April 2022. Acting within a set of restrictions specified and monitored by us, they’ll be responsible for the day-to-day asset management of these funds with the aim of achieving the funds’ investment objectives.

Scottish Widows will retain ownership of these funds and will remain responsible for defining the funds’ aims, determining the Investment Managers’ performance targets and the strict parameters on how they should be run. Their performance will be regularly monitored.

You don’t need to do anything. We’ll update our webpage with key information as the changes are made. Please check the website regularly to keep up to date with progress on the funds you’re invested in.

What’s changing?

The change of Investment Manager will apply to a number of Scottish Widows, Halifax and Clerical Medical funds.

We expect the new Investment Managers will change some of the assets currently held within the actively managed funds to reflect their views of assets in the funds, economic forecasts and the market.

Changes to assets within the actively managed funds will result in a short term increase in transaction costs to the funds, however, these will be capped and monitored by us to limit their impact on short term performance. More information on transaction costs and the limits that apply can be found below.

Your fund or funds within your unit-linked savings policy, protection plan, bond, endowment or pension plan may invest directly in assets, or indirectly through another fund (such as one of our OEIC funds), or through a range of funds for a multi-asset portfolio. If the fund invests directly in assets or via one of our OEIC funds then there may be a short term increase in transaction costs to the fund. If the fund is a multi-asset portfolio fund which invests in several other funds, then only some, or even none, of these underlying funds may be affected by this change. Where this is the case, the fund will bear minimal or no increase in transaction costs. If you’d like to understand how you’re invested you can call us.

There is also no change to external funds managed by third party fund managers, other than Aberdeen.

Example of the effect on a multi-asset portfolio fund

Example of the effect on a multi-asset portfolio fund

We’re currently assessing all of the Aberdeen-owned funds we invest in on a fund-by-fund basis and we’ll update this page with key information as the changes are made.

Some of our multi-asset funds, invest in a tactical asset allocation (TAA) fund managed on our behalf by Aberdeen. TAA involves adjusting the long-term asset allocation within a portfolio to capture shorter-term relative value opportunities in markets. Schroders will take over the management of this underlying tactical asset allocation fund in Q1 2020.

What’s not changing?

There won’t be a change to the funds’ annual management charges.

Our Governed Investment Strategies (GIS) and Pension Investment Approaches (PIA) also won’t change. GIS and PIA regularly rebalance and gradually move your pension into lower risk investments as you approach your selected retirement date.

Our Scottish Widows’ investment specialists will continue with long and medium-term strategic asset allocation for a number of Scottish Widows funds and portfolios to determine the optimal mix of asset classes, based on the expected return of those asset classes over five years and longer.

Transaction costs

Transaction costs may increase in the short term for some of the actively managed funds as investments are bought and sold with the aim of generating higher returns.

Read more

Thinking of cashing in?

We recognise that you may have an immediate need to cash in some or all of your policy or pension plan, and may have questions about the impact of transaction costs on short term fund performance.

Read more

Q&As

We’ve answered here questions you may have about this change.

Read more

We’re replacing Aberdeen as the Investment Adviser to most of our funds. Our actively managed funds, where the Investment Adviser seeks to add value by making decisions on which investments to buy, sell or hold will move to Schroders. The Halifax Ethical fund’s Adviser will be Hermes Investment Management.

We believe these appointments will benefit you through the prospect of improved future performance. The funds will continue to be managed within their existing risk profile.

The new Investment Advisers will take on the relevant funds over a period of time from the end of September 2019. Aberdeen will continue to manage our passive and property funds until April 2022. Acting within a set of restrictions specified and monitored by us, they’ll be responsible for the day-to-day asset management of these funds with the aim of achieving the funds’ investment objectives.

Scottish Widows will retain ownership of these funds and will remain responsible for defining the investment objectives and policies, determining the Investment Advisers’ performance targets and the strict parameters on how they should be run. Their performance will be regularly monitored.

You don’t need to do anything. We’ll update our webpage with key information as the changes are made. Please check the website regularly to keep up to date with progress on the funds you’re invested in.

What’s changing?

The change of Investment Adviser will apply to a number of Scottish Widows and Halifax funds.

We expect the new Investment Advisers will change some of the assets currently held within the actively managed funds to reflect their views of assets in the funds, economic forecasts and the market.

Changes to assets within the actively managed funds will result in a short term increase in transaction costs to the funds, however, these will be capped and monitored by us in order to limit their impact on short term performance. More information on transaction costs and the limits that apply can be found below.

There won’t be a change to the funds’ annual management charges.

Transaction costs

Transaction costs may increase in the short term for some of the actively managed funds as investments are bought and sold with the aim of generating higher returns.

Read more

Thinking of cashing in?

We recognise that you may have an immediate need to cash in some or all of your investment in a fund and may have questions about the impact of transaction costs on short term fund performance.

Read more

Q&As

We’ve answered here questions you may have about this change.

Read more

The Financial Conduct Authority, the regulator of the asset management industry, has set new standards for disclosure of fund objectives and identified other changes to help investors’ understanding and ability to compare fund performance.

Following this, we’ve reviewed our funds’ objectives and policies and we’re making updates to add clarification on the funds’ strategies, the assets they hold and how the funds seeks to achieve their objective.

Where a fund has a benchmark (the index against which the performance of the fund is measured), we’re making that clear in the fund’s objective. For other funds which don’t have a benchmark index, we’re suggesting an Investment Association sector of similar funds which can be used to compare performance.

You don’t need to do anything. We’ll update our webpage with key information as the changes are made. Please check the website regularly to keep up to date with progress on the funds you’re invested in.


Changes to our Halifax Funds

We’ve listed here the changes made to the objective and policy for each fund.

Read more

Changes to our Scottish Widows Funds

We’ve listed here the changes made to the objective and policy for each fund.

Read more

Update: January 2020

The Extraordinary General Meetings (EGMs) for each fund took place on 29th August 2019, and the votes for each fund were carried.

What happens after the proposal was approved?

The Managed Growth Funds have been merged into new corresponding funds within the Scottish Widows Investment Solutions Funds ICVC and kept under the management of Scottish Widows Unit Trust Managers Limited (SWUTM).

Background - as at July 2019

The Managed Growth Funds are currently sub funds of the Investment Portfolio ICVC. The aim of the proposal is to keep those Funds under the management of Scottish Widows Unit Trust Managers Limited (SWUTM).

To keep the Managed Growth Funds under SWUTM’s management, it’s necessary to merge the Managed Growth Funds into new corresponding funds within the Scottish Widows Investment Solutions Funds ICVC. The Investment Portfolio ICVC will then move to its new fund manager.

Why are we proposing to merge the funds?

Lloyds Banking Group (LBG) have entered into a new joint venture (JV) with Schroders plc. The JV is targeted towards high net worth individuals with an adviser actively providing investment advice. As the Managed Growth Funds were designed to support LBG Retail customers using a non-advised online product we believe that SWUTM is best placed to maintain the Managed Growth Funds going forward and provide continuity for investors.

The merger won’t alter your investment. It won’t affect how the funds are managed, or change the Funds’ objectives or policies.

There will be no changes to the asset allocation, charges or risk profile of your investment, as a result of the fund merger. The merger will not be treated as a disposal for tax purposes, meaning you’ll not be liable to pay any Capital Gains Tax as a result of the merger. The tax treatment of your investment will be unchanged.

Update: January 2020

The Extraordinary General Meetings (EGMs) for each fund took place on 29th August 2019 and the votes for all seven Solution funds were carried.

What happens now the vote is successful?

On 9th December 2019, in accordance with FCA requirements, the Authorised Corporate Director (ACD) for the Investment Portfolio and Multi-Manager Investment Companies with Variable Capital (ICVCs) changed from SWUTM to Scottish Widows Schroder Personal Wealth (ACD) Limited (SWSPWA). We wrote to you in October 2019 if you’re invested in funds within one or both of these ICVCs. If you hold ISA investments in these funds, SWSPWA also became your ISA Manager on that date.

Background

We’re proposing to merge our seven Solution funds in the Scottish Widows Investment Solutions Funds ICVC (Investment Company with Variable Capital) into the Investment Portfolio ICVC. Both ICVCs are currently managed by Scottish Widows Unit Trust Managers Limited (SWUTM). SWUTM is the Authorised Corporate Director (ACD) for both of the ICVCs.

By the end of 2019, subject to Financial Conduct Authority (FCA) approval, we aim to move the management of the Solution funds to a new joint venture between Lloyds Banking Group and Schroders plc. Scottish Widows is part of Lloyds Banking Group.

Why are we proposing to merge the funds?

We want to merge these funds to allow us to move the management of the Solution funds to a new company by the end of 2019. To do this, we need to move the Solution funds into the Investment Portfolio ICVC, which will then move across to the new company, subject to FCA approval.

This change won’t affect how the funds are managed, their objectives or policies. The new Solution funds will mirror the existing Solution funds. As part of this change there will be some changes to how your Account is administered and also changes to the service providers of the ICVCs. View more information about those changes.

Why do we want to move the ICVC to a new company?

Lloyds Banking Group have entered into a new joint venture with Schroders plc, called Schroders Personal Wealth, which continues our commitment in developing new capabilities to support you with your investments and financial planning. This joint venture brings together Lloyds Banking Group’s multi-channel and digital capabilities with Schroders’ strengths in active asset management and platform technology.

This joint venture aligns the expertise of Schroders Personal Wealth in portfolio construction, and the investment management strength of Schroders Investment Management, in providing adviser services to multi-asset funds.

Schroders is a global asset and wealth manager, who delivers a broad range of investment strategies designed to meet the diverse needs of investors. They are focused on providing investment solutions for wealth customers.

We believe that the investment capability and development of wealth management solutions that Schroders Personal Wealth provide will be beneficial in generating future returns for investors.

Further information

Independent advice

If you’re unsure about how any of these changes may affect your investments, we recommend that you speak to an independent adviser. If you don’t have an adviser you can find one at unbiased. Remember a financial adviser may charge for any advice they give.

You can find free and impartial money guidance from the government at www.moneyadviceservice.org.uk or by calling free:

0800 138 7777

Monday to Friday from 8am to 8pm, and Saturday from 9am to 1pm.

Glossary

It’s difficult to avoid jargon in financial services, so you may have come across some unfamiliar expressions. We’ve explained them here.

See glossary