Download A CLEAR AND SIMPLE

A CLEAR
AND SIMPLE
GUIDE
Investments
Pension Investment Options
royallondon.com
CONTENTS
2
Royal London – who we are
and what we do
3
Decisions needn’t be difficult
4
Your pension investment options
5
Understanding risk
6
Balancing your investment options
8
Asset classes explained
10
A strong governed range
13
Avoiding the unexpected
14
Choosing your own investments
19
Fund range
21
WHO WE ARE AND
WHAT WE DO
Ever since we started as a friendly society over 150 years ago,
at Royal London we believe that our difference is our strength,
and that there’s strength in everyone. That’s one reason why today,
we’re the UK’s largest mutual life and pensions company. And it’s also
why, whoever you are and whatever your aims, whether it’s pensions,
insurance or wealth management, we look to provide you with great
long-term value and first class service and support at all times.
3
DECISIONS
NEEDN’T BE
DIFFICULT
Today there are more investment choices
available than ever before. While choice is a
good thing, you may find it difficult to decide
on the best option for you. That’s why we’ve
put together this guide to choosing
your pension investments. It sets out the
options available to you when you invest in a
Royal London pension and some of the points
to consider when making your decision.
What we can’t do here is take your personal
circumstances into account. So if you’re still
unsure what to do after reading this, you
should talk to a financial adviser. Advisers
may charge for providing advice and should
confirm any costs beforehand.
4
YOUR PENSION
INVESTMENT
OPTIONS
Royal London offers a comprehensive
range of investment options to help
provide the best opportunity to grow
your retirement savings. We’ve also
designed the range to help you balance
the level of risk you’re willing to take
with the potential rewards you want
to achieve.
You have two main options*:
• You can invest in one of our specially
developed risk-graded portfolios or lifestyle
strategies from our Governed Range.
• Alternatively, you can create and manage
your own investment strategy by selecting
from our Fund Range.
Remember that the value of investments can
go down as well as up and you could get back
less than the amount paid in.
This guide explains the different options
available within the Governed Range.
They are designed for those who prefer
to select a ready-made investment that
we review on an on-going basis for added
peace of mind.
If you prefer to pick your own funds and have
more control over your investments, this guide
also shows you how to do this. We list the funds
available and give you some information about
each one.
Whichever option you choose, there are a
number of points you should consider before
you proceed – we’ve listed these on pages
19 and 20. At any time during your plan you
can change your investments by switching
to another investment option available in
our range.
One point you should consider is your attitude
to risk. This will play a big part in determining
the mix of investments that’s right for you.
If you prefer to pick your own funds
and have more control over your
investments, this guide also shows
you how to do this.
*Additional options, including a fund supermarket and direct
investment in stocks and shares, are also available exclusively
with our Pension Portfolio personal pension. Additional charges
apply for these investments. For details, please see our Pension
Portfolio Customer Guide.
5
UNDERSTANDING
RISK
Everybody’s view of risk is different.
Some people are comfortable taking risks
while others are naturally more risk-averse.
You may already know your attitude to
risk, but if not, don’t worry. We can help
give you an idea of what it is. Simply
complete our online risk questionnaire
at royallondon.com/pensioninvestments
All you have to do is answer twelve simple
questions about your current situation,
feelings and attitude to risk. We then produce
a report which confirms your answers and
gives you an idea of your risk category.
We have seven possible risk categories –
you’ll find these opposite.
6
Understanding how you feel about levels of risk is one of the
most important factors when choosing the right investment.
It means you can aim to maximise returns in a way you’re
comfortable with. Below, we’ve identified seven different
categories for you to consider.
RISK CATEGORY
Very Cautious
Moderately Adventurous
Knowing your capital is safe is more
important to you than high returns. You aren’t
comfortable with the thought of investing in
the stock market and would rather keep your
money in the bank.
You’re willing to take on investment risk and
understand that this is crucial in terms of
generating long-term returns. You’re willing
to take a risk with a substantial proportion
of your available assets.
Cautious
Adventurous
You generally don’t like to take risk with your
investments. You would prefer to keep your
money in the bank, but would be willing to
invest in other types of investments if they
were likely to be better for the longer term.
You’re happy to take on investment risk and
understand that this is crucial in terms of
generating long-term returns. You’re willing
to take a risk with most of your available assets.
Moderately Cautious
You’re looking for the highest possible
return on your capital and are willing to take
considerable amounts of risk to achieve this,
usually with all of your available assets.
You’re usually uncomfortable taking risk with
your investments, but would be willing to do
so to a limited extent. You realise that risky
investments are likely to be better for longer
term returns.
Very Adventurous
Balanced
You appreciate that you have to take
investment risk in order to be able to meet
your long-term goals. You’re willing to take a
risk with at least part of your available assets.
7
BALANCING YOUR
INVESTMENT
OPTIONS
Our aim is to maximise your investment
returns in line with your attitude to risk.
We do this by focusing on asset allocation.
This means creating a balance of investments
from the various asset classes available.
So, for example, if you had a ‘Balanced’
attitude to risk, you might invest in a mix
of assets such as property, cash deposits and
equities, also known as shares. Because these
asset classes perform differently, if one type
is falling in value, others may be rising.
8
Getting this balance right can make a huge
difference to how your investments perform.
However, it’s not just about getting the asset
allocation right at the start. Over time, returns
between different asset classes will vary, which
means the percentage invested in each asset
class will also change. So it’s important to
review the asset allocation regularly to make
sure it still matches your risk attitude.
If this all sounds a bit complicated and too
much like hard work, you might prefer to
invest in our Governed Range. This consists
of ready-made model portfolios and lifestyle
strategies designed to automatically deal with
these types of issues.
9
ASSET CLASSES
EXPLAINED
10
Some of our investment options
hold a mix of assets, such
as company shares, bonds,
property and cash. Others may
invest in a single type of asset.
We’ve summarised the main asset
types below.
Deposits
This term is used to describe
investments such as cash. They
work in much the same way as a
bank or building society account.
Investments are put on deposit with
a financial institution where they
earn interest. Deposits are generally
considered safer than other asset
classes; however, there may be times
when the rate of return is lower than
the charge applied to the policy.
Corporate bonds and gilts
Corporate bonds are loans to
companies for a set period. During
this period the company pays
interest and eventually returns the
original amount.
The main risk with a corporate
bond is that the company to which
the loan has been made might go
bankrupt and fail to pay it back.
Corporate bonds tend to be less
volatile investments than company
shares, but provide the opportunity
for higher growth than deposits.
Gilts are loans to the Government
and work in much the same way as
corporate bonds. However, gilts are
considered very safe investments,
since the Government is unlikely to
go bankrupt.
To date, the British Government
has never defaulted on a gilts issue.
Like corporate bonds, gilts tend to
be less volatile than company shares
but provide greater opportunities
for growth than deposits.
Property
There are two main types of property
funds:
Direct property funds invest in
bricks and mortar properties such
as retail outlets, industrial sites
and office buildings. One proviso:
because the property in a fund may
not be readily saleable, it’s possible
that you might not be able to cash in
your investment in a property fund
when you want to. Also the value
of property is generally a matter of
a valuer’s opinion rather than fact.
Property security funds invest in
Real Estate Investment Trusts and
shares in property companies.
These funds typically experience
short-term price movements
similar to equity funds but would
be expected to have characteristics
similar to direct property funds over
the longer term. They are also less
likely to place restrictions on
cashing in your investment than
direct property funds.
Equities
Equities are company shares.
Limited companies can sell their
shares to raise capital, paying a share
of their profit (known as a dividend)
to the buyer in return. Shares are
bought and sold on the stock market,
and their prices fluctuate based on
a number of factors including the
company’s potential profitability. As
a result, they tend to be too volatile
for short-term investors. However,
it’s widely accepted that equities
have the potential for better returns
over medium and longer terms. It’s
also worth bearing in mind that
equities traded on some overseas
stock exchanges can be more volatile
than UK equities. They are also
affected by fluctuations in currency
exchange rates.
Mixed assets
Some funds will invest in a mixture
of different asset classes, such as
company shares, property and
deposits. This way, if one particular
investment performs poorly, you
won’t be as badly affected because
your risk is spread more widely.
Specialist
Some funds have an investment
universe that is not accommodated
by the mainstream sectors. These
will be included in the specialist
sector. This sector is hugely diverse
and will contain funds with various
investment objectives and styles.
If you’ve read this and decided that
taking charge of your investments is
right for you, you’ll find a list of the
funds you can choose from on pages
22-27.
11
12
A STRONG
GOVERNED
RANGE
We explained earlier why it’s important
to match your asset allocation to your risk
attitude. The Governed Range does this for
you. Each option has been designed for a
particular risk attitude, which means we take
care of the asset allocation for you. However,
if you’re in either the ‘Very Cautious’ or ‘Very
Adventurous’ category you should seek more
specialist advice from your adviser.
All of our options in the Governed Range
have on-going governance. This simply
means that our investment experts review
it regularly. It allows us to maintain an
appropriate asset allocation to match
your risk attitude – and to make sure it’s
performing in line with its objectives –
aiming to maximise real returns for the level
of risk taken.
Please note that investment returns
may fluctuate and are not guaranteed.
If our experts decide that a change to the
asset allocation should be made, it will take
place automatically on your behalf; you
don’t need to do anything. What’s more,
this service comes at no extra cost.
13
AVOIDING THE
UNEXPECTED
Governed Portfolios
The Governed Portfolios are a range of nine
mixed asset portfolios which are suitable for
different risk categories and terms to retirement.
You can invest in any of the nine Governed
Portfolios individually.
It is important to remember that as time passes
the amount in each fund will grow at different
rates. This could change the suitability of your
chosen Governed Portfolio. To avoid this we’ll
automatically rebalance your funds on a monthly
basis. This means the mix of funds within the
portfolio which matched your original attitude
to risk and time to retirement is maintained. This
service as well as the ongoing governance doesn’t
cost you anything extra.
You can find out more by viewing our portfolio
factsheets at royallondon.com/pensioninvestments
14
Governed Lifestyle Strategies
The Target Cash, Target Annuity and Target
Drawdown strategies share a similar asset allocation
journey until five years before the retirement date.
At that point, each strategy takes off on their unique
glidepath with their aim of delivering a fluid and
gradual descent to your desired outcome, as shown in
the table below.
Our range of Lifestyle Strategies have been
designed to gradually switch from higher to lower
risk portfolios as you approach retirement age.
For each risk category you can choose a Target
Lifestyle Strategy to target either cash, annuity or
drawdown at retirement.
There are three Target Lifestyle Strategies to choose
from, depending on the equity fund you prefer. We
explain these below:
Target Lifestyle Strategy
Your Lifestyle Journey
Risk Category
At 15 yrs +
At 10 yrs
At 5 yrs
Retirement
Cautious
Governed
Portfolio 1
Governed
Portfolio 2 *
Governed
Portfolio 3 *
Target Cash,
Target Annuity,
Target Drawdown
Moderately Cautious
Governed
Portfolio 4
Governed
Portfolio 5 *
Governed
Portfolio 3 *
Target Cash,
Target Annuity,
Target Drawdown
Balanced
Governed
Portfolio 4
Governed
Portfolio 5 *
Governed
Portfolio 6 *
Target Cash,
Target Annuity,
Target Drawdown
Moderately Adventurous
Governed
Portfolio 7
Governed
Portfolio 5 *
Governed
Portfolio 6 *
Target Cash,
Target Annuity,
Target Drawdown
Adventurous
Governed
Portfolio 7
Governed
Portfolio 8 *
Governed
Portfolio 9 *
Target Cash,
Target Annuity,
Target Drawdown
Target Lifestyle Strategy
Flexible Lifestyle Strategy
This lifestyle strategy invests the equity portion in
the RLP Global Managed fund. This is an actively
managed global equity fund that’s automatically
blended between UK and overseas equities as part
of our governance review process.
A flexible lifestyle strategy allows you to choose
which Governed Portfolios to switch into as you
near retirement, rather than using one of our predetermined routes.
Target Lifestyle Strategy – Tracker option
This tracker version invests the equity portion in the
RLP/BlackRock Aquila Global Blend fund. This
is a global equity tracker fund that’s automatically
blended between UK and overseas equities as part of
our governance review process.
Target Lifestyle Strategy – Active option
This active version invests the equity portion of each
portfolio in a specialist fund of funds, the RLP Global
Blend Core Plus (Rathbone Global Alpha) fund.
This is an actively managed global equity fund that’s
automatically blended between UK and overseas
equities as part of our governance review process.
You can choose to target either cash, annuity
or drawdown at retirement.
If you choose to invest in either a Governed
portfolio or a Governed Lifestyle Strategy, please
note that this investment choice must apply to all
contributions into your plan.
The tables on the next page provide more details
about each of the Governed Portfolios and Target
Lifestyle Strategies.
*The asset allocation of each Governed Portfolio will depend
on what the strategy is targeting at retirement.
Please refer to the Strategy factsheets available on our website
at royallondon.com
15
Governed Portfolios
Management
Charge1
Management
Style
Risk Category
Time
Period
Available for
Individual
Stakeholder2
Available for
Group
Stakeholder
1.00%
Active
Cautious
Long
N
Y
Governed Portfolio 1
Governed Portfolio 2
1.00%
Active
Cautious
Medium
N
Y
Governed Portfolio 3
1.00%
Active
Cautious / Moderately Cautious
Short
N
Y
Governed Portfolio 4
1.00%
Active
Moderately Cautious / Balanced
Long
N
Y
Governed Portfolio 5
1.00%
Active
Moderately Cautious / Balanced /
Moderately Adventurous
Medium
N
Y
Governed Portfolio 6
1.00%
Active
Balanced / Moderately Adventurous
Short
N
Y
Governed Portfolio 7
1.00%
Active
Moderately Adventurous / Adventurous
Long
N
Y
Governed Portfolio 8
1.00%
Active
Adventurous
Medium
N
Y
Governed Portfolio 9
1.00%
Active
Adventurous
Short
N
Y
Within each Governed Portfolio there’s an option to replace the default equity fund, the RLP Global Managed Pension fund. This could result in an additional fund
management charge, depending on the fund chosen.
Target Lifestyle Strategies
Management
Charge1
Management
Style
Risk Category
Available for
Individual
Stakeholder 2
Available for
Group
Stakeholder
Cautious
N
Y
(equity portion)
Cautious Lifestyle Strategy
1.00%
Active
Cautious Tracker Lifestyle Strategy
1.00%
Tracker
Cautious
N
Y
Cautious Active Lifestyle Strategy
–
Active
Cautious
N
N
Moderately Cautious Lifestyle Strategy
1.00%
Active
Moderately Cautious
N
Y
Moderately Cautious Tracker Lifestyle Strategy
1.00%
Tracker
Moderately Cautious
N
Y
Moderately Cautious Active Lifestyle Strategy
–
Active
Moderately Cautious
N
N
Balanced Lifestyle Strategy
1.00%
Active
Balanced
N
Y
Balanced Tracker Lifestyle Strategy
1.00%
Tracker
Balanced
N
Y
Balanced Active Lifestyle Strategy
–
Active
Balanced
N
N
Moderately Adventurous Lifestyle Strategy
1.00%
Active
Moderately Adventurous
N
Y
Moderately Adventurous Tracker Lifestyle Strategy
1.00%
Tracker
Moderately Adventurous
N
Y
–
Active
Moderately Adventurous
N
N
Adventurous Lifestyle Strategy
Moderately Adventurous Active Lifestyle Strategy
1.00%
Active
Adventurous
N
Y
Adventurous Tracker Lifestyle Strategy
1.00%
Tracker
Adventurous
N
Y
–
Active
Adventurous
N
N
1.00%
Active
Balanced
Y
Y
Adventurous Active Lifestyle Strategy
Managed Lifestyle Strategy
1
The range of Active Lifestyle Strategies has a variable annual management charge applicable dependent on the time to retirement and proportion invested in each fund.
The Active Lifestyle Strategies invest in the RLP Global Blend Core Plus (Rathbone Global Alpha) fund which has a fund management charge of 1.45%.
2
These options might be available for existing Individual Stakeholder Pension Plans. If you have an Individual Stakeholder Pension Plan you should check with our customer
service team what investment options are available for you.
Please note that for each Target Lifestyle Strategy you have the option to target cash, annuity or drawdown at retirement.
For more information about the Target Lifestyle Strategies, including details of the individual funds within each strategy and their fund management charges, please visit
royallondon.com/pensioninvestments
16
Governed Retirement Income Portfolios
If you’re taking income from your pension you can choose to invest in a Governed Retirement Income Portfolio. The
portfolios are designed to suit customers with different risk attitudes and invest in a mix of equities, bonds and property
funds managed by Royal London Asset Management (RLAM). There is also the option to replace the default equity fund
– the Global Managed Fund – to an alternative equity fund or funds from a selection of fund managers available within
our range. Benchmark asset allocations are shown below.
Governed Retirement Income Portfolios
Governed Retirement
Income Portfolio 1
Governed Retirement
Income Portfolio 2
Governed Retirement
Income Portfolio 3
Governed Retirement
Income Portfolio 4
Governed Retirement
Income Portfolio 5
10.0% Global Managed
17.0% Global Managed
23.0% Global Managed
35.0% Global Managed
53.5% Global Managed
12.5% Medium (10yr)
20.0% Medium (10yr)
28.5% Medium (10yr)
30.0% Medium (10yr)
65.5% Medium (10yr)
43.5% Medium (10yr)
20.5% Medium (10yr)
25.0% Sterling Extra
25.0% Sterling Extra
8.5% Sterling Extra
14.0% Sterling Extra
20.0% Sterling Extra
10.0% Property
10.0% Property
3.5% Property
5.5% Property
8.0% Property
Corporate Bond
Index Linked
Yield Bonds
Corporate Bond
Index Linked
Yield Bonds
Corporate Bond
Index Linked
Yield Bonds
Corporate Bond
Yield Bonds
11.5% Medium (10yr)
Corporate Bond
Yield Bonds
RISK
Lower
Higher
You can view the latest asset allocations at royallondon.com/pensioninvestments
17
18
CHOOSING
YOUR OWN
INVESTMENTS
Alternatively, you might prefer to select your
own investments. This can be very rewarding,
but it takes skill and commitment on your, or
your adviser’s, part. Not surprisingly, this
option is most suited to people with good
investment knowledge who want lots of
control over their investments.
To help you make this important decision, we’ve
listed seven points below that you should consider.
If you decide to create an investment portfolio
by picking your own funds, it will be up to you,
in conjunction with your adviser, to monitor their
performance and decide whether you need to
change them. You may also need to adjust your
portfolio regularly to keep it in line with your
changing risk attitude.
1. Make sure you’re paying enough into
your pension
The amount you will need to pay into your pension
will obviously be different for everyone. However,
generally the more you pay into a pension plan, the
more you can expect to receive when you retire. So
you should try to save as much as you can, as early
as you can. For detailed information and to work out
your personal requirements you should speak to
your adviser.
In our opinion:
People often ask, ‘How much will I get when I retire?’.
The truth is that all the choices you make now and at
retirement will influence the value of your pension.
The amount you get back depends on: how much
you pay into your plan, how long your payments are
invested, what funds you are invested in, how those
funds perform, and also the plan charges.
2. Spread your investments
In our opinion:
Most financial experts agree that the best way to invest
your retirement savings is to have a spread of investment
types. So for example you might invest in a mix of
property, cash deposits and equities. This way, if one
particular investment performs poorly, you wouldn’t be
as badly affected.
The balance of the different types of investment is
called ‘asset allocation’ by the City experts. Getting that
balance right can make a huge difference to how your
investments perform. Our view is that up to 90 percent
of performance stems from asset allocation rather than
from just picking a star performing fund.
19
3. Consider the impact of inflation
In our opinion:
Over time, inflation can erode the purchasing power
of your savings. For example, the higher prices of
goods rise, the less you can buy with your money
over time.
If the return on your investment is below the rate of
inflation, your investment could lose value in real terms.
4. Choose funds that match your attitude to risk
In our opinion:
The more risk you’re willing to take with your
investments, the higher your potential return – but the
greater your chance of loss. Lower risk investments
on the other hand offer greater security but lower
potential returns. You need to decide how much risk
you want to take with your pension savings.
If you’re looking for a way of achieving high returns
with low risk, you can save yourself a frustrating search:
there isn’t one! If you want to chase high returns, you’ll
need to accept risk.
Some asset classes, such as equities, property and indexlinked gilts, could offer better protection from the effects
of inflation over the longer term than others such as cash.
A weakness of constructing a portfolio of funds to
match your risk profile is that it almost immediately
drifts away from your initial allocation. This can
expose you to more risk than you may be
comfortable with.
You’ll also need to review your portfolio regularly
and make any changes necessary to maintain your
original asset allocation. You can do this by selecting
the automatic rebalancing option on your investment.
There’s a choice of rebalancing frequencies monthly,
quarterly, half yearly and annually and they’re available
at no extra cost.
5. Think about how long you have to save
In our opinion:
How suitable a particular investment is for you
depends in part on how long you have until you
retire. For example, someone in their twenties will
probably want to achieve maximum capital growth
so may invest in more aggressive funds. An investor
only a few months from retirement will probably
want to take far less risk – or no risk at all.
Some people may be tempted to make up for lost time
as they approach retirement by going for really risky
options. It’s your choice. but if you go down this road,
make sure you’re prepared for any consequences.
6. Think about any specific requirements
you have
In our opinion:
You might want to invest in a particular
geographic area or in small companies rather
than multinationals. Whatever your requirements,
it’s possible to choose funds that reflect
your preferences.
You’ll find descriptions of all our funds in Fund Factsheets
available on our website at royallondon.com. Reading
these will help you make an informed decision.
7. Monitor your investments regularly
In our opinion:
It isn’t enough to select appropriate funds at the
start of your plan. You also need to monitor the
performance of your funds regularly to make sure
they suit your changing needs. This can help you
protect your savings from market falls and take
advantage of growth opportunities.
With us, you can change your investments free of charge.
You might even be able to do it online. But be careful
about shifting investments around too often – it’s a
marathon, not a sprint.
20
FUND
RANGE
We have over 160 funds available from
a wide range of fund managers.
The range of funds and fund managers gives
you a choice of different investment styles and
exposure to different geographical areas.
If you would like to know more about any of
the fund managers please visit our website
royallondon.com/pensioninvestments
The full fund range is listed by asset class on the
pages that follow.
ASSET MANAGEMENT
21
FUND RANGE
Deposit
Fund Name
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund Management
Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Deposit
0.00%
0.00%
1.00%
Active
0.05
Y
N
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund Management
Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Annuity Fund
0.00%
0.00%
1.00%
Active
N/A
Y
N
RLP Corporate Bond
0.00%
0.00%
1.00%
Active
5.04
Y
N
RLP Ethical Bond
0.00%
0.00%
1.00%
Active
5.40
Y
N
RLP Fixed Interest
0.00%
0.00%
1.00%
Active
6.66
Y
N
RLP Global High Yield Bond
0.00%
0.00%
1.00%
Active
4.79
Y
N
RLP Global Index Linked
0.00%
0.00%
1.00%
Active
5.13
Y
N
RLP Index Linked
0.00%
0.00%
1.00%
Active
10.89
Y
N
RLP International Government
Bond
0.00%
0.00%
1.00%
Active
2.79
Y
N
RLP Long (15yr+) Corporate
Bond
0.00%
0.00%
1.00%
Active
11.48
Y
N
RLP Long (15yr+) Gilt
0.00%
0.00%
1.00%
Active
10.83
Y
N
RLP Long (15yr+) Index Linked
0.00%
0.00%
1.00%
Active
8.13
Y
N
RLP Medium (10yr) Corporate
Bond
0.00%
0.00%
1.00%
Active
7.82
Y
N
RLP Medium (10yr) Gilt
0.00%
0.00%
1.00%
Active
6.92
Y
N
RLP Medium (10yr) Index Linked
0.00%
0.00%
1.00%
Active
4.90
Y
N
RLP Short (5yr) Corporate Bond
0.00%
0.00%
1.00%
Active
3.68
Y
N
RLP Short (5yr) Gilt
0.00%
0.00%
1.00%
Active
2.99
Y
N
RLP Short (5yr) Index Linked
0.00%
0.00%
1.00%
Active
2.35
Y
N
RLP Short Duration Global High
Yield
0.00%
0.00%
1.00%
Active
1.32
Y
N
RLP Sterling Extra Yield Bond
0.00%
0.00%
1.00%
Active
4.35
Y
N
RLP UK Government Bond
0.00%
0.00%
1.00%
Active
6.78
Y
N
RLP/Baillie Gifford High Yield
Bond
0.30%
0.02%
1.32%
Active
5.58
N
N
RLP/BlackRock Aquila Long
Gilt Index
0.00%
0.00%
1.00%
Tracker
13.72
Y
N
RLP/BlackRock Aquila Over 5
years Index linked Gilt Index
0.00%
0.00%
1.00%
Tracker
12.93
Y
N
RLP/BlackRock Aquila UK All
Stocks Corporate Bond Index
0.00%
0.00%
1.00%
Tracker
6.40
Y
N
RLP/Fidelity Moneybuilder
Income
0.25%
0.19%
1.44%
Active
5.73
N
N
RLP/Fidelity Strategic Bond
0.45%
0.19%
1.64%
Active
4.22
N
N
RLP/Invesco Perpetual Corporate
Bond
0.45%
0.16%
1.61%
Active
3.75
N
N
RLP/Invesco Perpetual Global
Bond
0.45%
0.17%
1.62%
Active
4.88
N
N
RLP/Invesco Perpetual Monthly
Income Plus
0.58%
0.09%
1.67%
Active
4.10
N
N
RLP/Investec Emerging Markets
Local Currency Debt
0.70%
0.16%
1.86%
Active
14.62
N
N
RLP/M&G Corporate Bond
0.45%
0.16%
1.61%
Active
5.15
N
N
RLP/M&G Global High Yield
Bond
0.58%
0.16%
1.74%
Active
5.76
N
N
RLP/M&G Optimal Income
0.58%
0.16%
1.74%
Active
3.75
N
N
RLP/M&G Strategic Corporate
Bond
0.45%
0.16%
1.61%
Active
4.64
N
N
Government and Corporate Bond
Fund Name
22
Property
Fund Name
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund Management
Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Property
0.00%
0.00%
1.00%
Active
2.30
Y
N
RLP/Schroder Global Real Estate
Securities
0.70%
0.18%
1.88%
Active
13.63
N
N
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund Management
Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
Mixed Asset
Fund Name
Royal London With Profits
0.00%
N/A
N/A
Active
N/A
Y
N
RLP Adventurous Managed
0.00%
0.00%
1.00%
Active
6.88
Y
N
RLP Defensive Managed
0.00%
0.00%
1.00%
Active
3.87
Y
N
RLP Managed
0.00%
0.00%
1.00%
Active
6.01
Y
N
RLP Sustainable Diversified Trust
0.45%
0.02%
1.47%
Active
N/A
N
N
RLP/7IM AAP Adventurous
0.45%
0.13%
1.58%
Active
10.44
N
N
RLP/7IM AAP Balanced
0.45%
0.10%
1.55%
Active
7.57
N
N
RLP/7IM AAP Moderately
Adventurous
0.45%
0.10%
1.55%
Active
9.18
N
N
RLP/7IM AAP Moderately
Cautious
0.45%
0.14%
1.59%
Active
5.10
N
N
RLP/BlackRock Aquila Consensus
0.00%
0.00%
1.00%
Tracker
9.20
Y
N
RLP/BMF Balanced
0.45%
0.89%
2.34%
Active
7.61
N
N
RLP/BMF Cautious Growth
0.45%
0.77%
2.22%
Active
5.71
N
N
RLP/BMF Defensive Income
0.45%
0.85%
2.30%
Active
4.40
N
N
RLP/Invesco Perpetual
Distribution
0.64%
0.13%
1.77%
Active
5.12
N
N
RLP/Investec Cautious Managed
0.58%
0.09%
1.67%
Active
6.44
N
N
RLP/Jupiter Merlin Balanced
Portfolio
0.70%
0.88%
2.58%
Active
8.29
N
N
RLP/Jupiter Merlin Growth
Portfolio
0.70%
0.94%
2.64%
Active
9.44
N
N
RLP/Jupiter Merlin Income
Portfolio
0.70%
0.77%
2.47%
Active
6.36
N
N
RLP/Man GLG Balanced
Managed
0.45%
0.15%
1.60%
Active
7.71
N
N
RLP/Man GLG Stockmarket
Managed
0.45%
0.15%
1.60%
Active
8.80
N
N
RLP/Neptune Balanced
0.70%
0.09%
1.79%
Active
9.68
N
N
RLP/Neptune Global Alpha
0.95%
0.11%
2.06%
Active
14.47
N
N
RLP/Newton Mutli-Asset Balanced
0.45%
0.11%
1.56%
Active
7.63
N
N
RLP/Newton Multi-Asset Growth
0.45%
0.12%
1.57%
Active
9.39
N
N
RLP/Rathbone Enhanced Growth
0.45%
0.87%
2.32%
Active
9.49
N
N
RLP/Rathbone Strategic Growth
0.45%
0.84%
2.29%
Active
5.59
N
N
RLP/Rathbone Total Return
0.45%
0.69%
2.14%
Active
2.87
N
N
RLP/Schroder Managed Balanced
0.35%
0.10%
1.45%
Active
7.55
N
N
RLP/Schroder MM Diversity
0.35%
0.77%
2.12%
Active
3.54
N
N
RLP/Schroder MM Diversity
Balanced
0.35%
0.81%
2.16%
Active
5.90
N
N
RLP/Schroder MM Diversity
Tactical
0.35%
0.83%
2.18%
Active
5.72
N
N
RLP/UBS Global Allocation
0.40%
0.07%
1.47%
Active
8.17
N
N
23
UK Equity
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Equity Income
0.00%
0.00%
1.00%
Active
8.80
Y
Y
RLP UK Equity
0.00%
0.00%
1.00%
Active
8.90
Y
Y
RLP UK Ethical
0.00%
0.00%
1.00%
Active
9.48
Y
Y
RLP UK Mid Cap
0.00%
0.00%
1.00%
Active
11.90
Y
Y
RLP UK Smaller Companies
0.00%
0.00%
1.00%
Active
11.34
Y
Y
RLP UK Opportunities
0.00%
0.00%
1.00%
Active
9.96
Y
Y
RLP/Baillie Gifford UK Equity
0.50%
0.00%
1.50%
Active
10.82
N
Y
RLP/BlackRock Aquila UK
Equity Index 6
0.00%
0.00%
1.00%
Tracker
10.33
Y
Y
RLP/BlackRock UK Equity
0.35%
0.02%
1.37%
Active
9.46
N
Y
RLP/Dimensional UK Core Equity
0.12%
0.08%
1.20%
Tracker
N/A
N
Y
RLP/Fidelity UK Growth
0.95%
0.20%
2.15%
Active
10.23
N
Y
RLP/Invesco Perpetual High
Income
0.70%
0.17%
1.87%
Active
8.16
N
Y
RLP/Investec UK Special Situations
0.70%
0.10%
1.80%
Active
9.72
N
Y
RLP/M&G Recovery
0.70%
0.16%
1.86%
Active
11.30
N
Y
RLP/Schroder Income Maximiser
0.70%
0.16%
1.86%
Active
9.47
N
Y
RLP/Schroder MM UK Growth
0.35%
0.97%
2.32%
Active
9.98
N
Y
RLP UK Equity Core Plus (Close
Teams UK Equities (1%)) 6
0.35%
0.03%
1.38%
Active
11.66
N
Y
RLP UK Equity Core Plus (Close
Teams UK Equities (2%)) 6
0.60%
0.05%
1.65%
Active
12.24
N
Y
RLP UK Equity Core Plus
(Schroder Core UK Equity) 6+7
0.70%
0.18%
1.88%
Active
10.58
N
Y
RLP UK Equity Core Plus
(Schroder UK Equity) 6
0.70%
0.17%
1.87%
Active
9.56
N
Y
RLP UK Equity Specialist
(Artemis UK Special Situations) 6
0.70%
0.06%
1.76%
Active
9.08
N
Y
RLP UK Equity Specialist (Invesco
Perpetual UK Growth) 6
0.60%
0.16%
1.76%
Active
11.04
N
Y
RLP UK Equity Specialist
(Schroder UK Alpha Plus) 6
0.70%
0.16%
1.86%
Active
9.72
N
Y
RLP UK Income Core Plus
(Artemis Income) 6
0.70%
0.04%
1.74%
Active
8.64
N
Y
RLP UK Income Specialist (Fidelity
Moneybuilder Dividend) 6+12
0.30%
0.17%
1.47%
Active
8.17
N
Y
RLP UK Mid Cap Specialist
(Franklin UK Mid Cap) 6+10
0.70%
0.07%
1.77%
Active
12.98
N
Y
RLP UK Small Cap Specialist
(Investec UK Smaller Companies) 5
0.70%
0.09%
1.79%
Active
13.11
N
Y
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP American
0.00%
0.00%
1.00%
Tracker
11.95
Y
Y
RLP/BlackRock Aquila US Equity
Index 6
0.00%
0.00%
1.00%
Tracker
12.26
N
Y
RLP/Legg Mason IF Royce US
Smaller Companies
0.70%
0.24%
1.94%
Active
14.81
N
Y
RLP/Neptune US Opportunities
0.70%
0.07%
1.77%
Active
13.91
N
Y
RLP/Schroder US Mid Cap
0.70%
0.16%
1.86%
Active
11.11
N
Y
0.95%
0.20%
2.15%
Active
11.87
N
Y
0.70%
0.18%
1.88%
Active
12.85
N
Y
Fund Name
US Equity
Fund Name
RLP US Core Plus (Fidelity
American) 6+10
RLP US Specialist ( JPMorgan US)
24
6
European Equity
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP European
0.00%
0.00%
1.00%
Active
11.45
Y
Y
RLP/BlackRock Aquila European
Equity Index 6
0.00%
0.00%
1.00%
Tracker
13.43
N
Y
RLP/Jupiter European Special
Situations
0.70%
0.28%
1.98%
Active
10.76
N
Y
RLP/Schroder European
Opportunities
0.70%
0.17%
1.87%
Active
11.47
N
Y
RLP Europe Core Plus (Fidelity
European Blended) 6
0.95%
0.21%
2.16%
Active
11.00
N
Y
RLP Europe Specialist (Neptune
European Opportunities) 9
0.70%
0.10%
1.80%
Active
17.24
N
Y
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Far East (ex Japan)
0.00%
0.00%
1.00%
Tracker
14.09
Y
Y
RLP Japan
0.00%
0.00%
1.00%
Tracker
12.87
Y
Y
RLP Pacific
0.00%
0.00%
1.00%
Tracker
12.35
Y
Y
RLP/BlackRock Aquila Japanese
Equity Index
0.00%
0.00%
1.00%
Tracker
13.45
N
Y
RLP/BlackRock Aquila Pacific
Rim Equity Index
0.00%
0.00%
1.00%
Tracker
15.70
N
Y
RLP/Fidelity South East Asia
0.95%
0.22%
2.17%
Active
14.68
N
Y
RLP Asia Pacific Core Plus (Stewart
Investors Asia Pacific Leaders)
0.80%
0.05%
1.85%
Active
12.55
N
Y
RLP Asia Pacific Core Plus
(Invesco Perpetual Asian) 6
0.70%
0.20%
1.90%
Active
15.95
N
Y
RLP Japan Core Plus (Schroder
Tokyo) 6
0.70%
0.16%
1.86%
Active
12.80
N
Y
RLP Japan Specialist (Invesco
Perpetual Japan) 6+8
0.70%
0.18%
1.88%
Active
12.77
N
Y
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Global Equity
0.00%
0.00%
1.00%
Active
9.27
Y
Y
RLP Global Managed
0.00%
0.00%
1.00%
Active
9.05
Y
Y
RLP Worldwide
0.00%
0.00%
1.00%
Active
10.26
Y
Y
RLP/Baillie Gifford Worldwide
Equity (50:50)
0.50%
0.01%
1.51%
Active
10.33
N
Y
RLP/BlackRock Aquila Global
Blend 5
0.00%
0.00%
1.00%
Tracker
10.46
Y
Y
RLP/BlackRock Aquila Global
Equity Index (50:50)
0.00%
0.00%
1.00%
Tracker
10.78
Y
Y
RLP/BlackRock Aquila Global
Equity Index (60:40) 6
0.00%
0.00%
1.00%
Tracker
10.87
Y
Y
RLP/BlackRock Aquila World
(ex UK) Equity Index
0.00%
0.00%
1.00%
Tracker
11.64
Y
Y
RLP/Dimensional Global Core
Equity
0.25%
0.08%
1.33%
Tracker
N/A
N
Y
RLP/Dimensional Global
Targeted Value
0.45%
0.08%
1.53%
Tracker
N/A
N
Y
RLP/Fidelity Special Situations
Blended
0.95%
0.19%
2.14%
Active
10.08
N
Y
RLP/First State Global Listed
Infrastructure
0.70%
0.08%
1.78%
Active
11.91
N
Y
RLP/HSBC Amanah Global
Equity Index
0.00%
0.25%
1.25%
Tracker
12.07
N
Y
RLP/Jupiter Ecology
0.70%
0.03%
1.73%
Active
10.62
N
Y
RLP/Jupiter Merlin Worldwide
Portfolio
0.70%
1.05%
2.75%
Active
10.63
N
N
RLP/M&G Global Basics
0.70%
0.18%
1.88%
Active
11.81
N
Y
Fund Name
Asian Equity
Fund Name
Global Equity
Fund Name
25
Global Equity continued
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP/M&G Global Dividend
0.70%
0.17%
1.87%
Active
12.40
N
Y
RLP/M&G Global Leaders
0.70%
0.17%
1.87%
Active
12.12
N
Y
RLP/Neptune Global Equity
0.70%
0.09%
1.79%
Active
12.84
N
Y
RLP/Newton Global Income
0.70%
0.11%
1.81%
Active
10.27
N
Y
RLP/Sarasin Food & Agriculture
Opportunities
0.70%
0.24%
1.94%
Active
10.15
N
Y
RLP/Schroder MM International
0.35%
0.93%
2.28%
Active
9.32
N
Y
RLP/UBS Global Blend (50:50)
0.60%
0.24%
1.84%
Active
10.94
N
Y
RLP Global Blend Core Plus
(Rathbone Global Alpha) 6
0.45%
0.79%
2.24%
Active
9.62
N
Y
RLP Global Managed Equity
Specialist (Invesco Perpetual
Global Equity) 6
0.60%
0.17%
1.77%
Active
11.91
N
Y
RLP Global Managed Equity
Specialist (Investec Global
Strategic Equity)
0.70%
0.12%
1.82%
Active
11.32
N
Y
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP/BlackRock Emerging
Markets Tracker
0.15%
0.06%
1.21%
Tracker
16.46
N
Y
RLP/Columbia Threadneedle
Latin America
0.70%
0.20%
1.90%
Active
25.36
N
Y
RLP/Dimensional Emerging
Markets Core Equity
0.50%
0.14%
1.64%
Tracker
N/A
N
Y
RLP/Fidelity Emerging Europe,
Middle East and Africa
0.95%
0.38%
2.33%
Active
15.58
N
Y
RLP/Henderson China
Opportunities
0.70%
0.23%
1.93%
Active
17.79
N
Y
RLP/JPMorgan Emerging
Europe Equity
0.70%
0.18%
1.88%
Active
18.49
N
Y
RLP/Jupiter India
0.70%
0.34%
2.04%
Active
22.28
N
Y
RLP Emerging Markets Core Plus
( JPM Emerging Markets) 6+11
0.70%
0.18%
1.88%
Active
16.07
N
Y
Additional Fund
Management
Charge1
Investment
Expenses2
Total Expense
Ratio3
Fund
Management Style
Fund
Volatility4
Available for
Stakeholder
Can be used
within Governed
Portfolios5
RLP Absolute Return
Government Bond
0.00%
0.00%
1.00%
Active
N/A
Y
N
RLP Cash Plus
0.00%
0.00%
1.00%
Active
0.20
Y
N
RLP Commodity
0.00%
0.00%
1.00%
Tracker
N/A
Y
N
RLP Enhanced Cash Plus
0.00%
0.00%
1.00%
Active
N/A
Y
N
RLP/BlackRock Gold and General 5
0.83%
0.17%
2.00%
Active
38.34
N
Y
RLP/Columbia Threadneedle
Absolute Return Bond
0.58%
0.16%
1.74%
Active
4.75
N
N
RLP/Investec Global Energy
Fund Name
Emerging Market Equity
Fund Name
Specialist
Fund Name
0.70%
0.14%
1.84%
Active
22.43
N
Y
RLP/JPMorgan Cautious Managed
0.58%
0.18%
1.76%
Active
4.46
N
N
RLP/JPMorgan Natural Resources 5
0.70%
0.18%
1.88%
Active
25.97
N
Y
RLP/Jupiter Financial Opportunities 5
0.70%
0.24%
1.94%
Active
10.89
N
Y
RLP/Newton Real Return
0.70%
0.11%
1.81%
Active
5.45
N
N
RLP/Standard Life Global
Absolute Return Strategies
0.70%
0.08%
1.78%
Active
4.43
N
Y
26
5
These charges are added to the annual management charge for your plan.
The expenses shown are the typical costs incurred by the investment management
company, which are deducted from the value of the fund. The level of these expenses
is not in Royal London’s control and may vary from year to year.
3
Total Expense Ratio (TER), covering calendar year 2016. The TER is a measure of
the overall cost of a fund to the investor. It includes the Fund Management Charge
plus any audit, custodian, registration or compliance fees paid out of the fund’s
assets. It does not include the costs of buying and selling securities, which would
still be paid if investing directly in securities instead of through an investment fund.
4
Source: Lipper. The Fund Volatility figure shown is the annualised standard
deviation of the monthly returns on the fund over a 3 year time period to
31.03.2017. Standard deviation is a measure of the spread of monthly returns
around the average (mean) return. A higher volatility figure indicates that the fund
has produced a wider range of returns over the three year period while ab fund
with a lower volatility figure has been more stable.
5
Matrix funds
underlying fund, to a suitable alternative fund meaning
that you continue to be invested as initially expected. Any
change to a Matrix fund would be communicated to you
in advance giving you, and your adviser, time to review
your options.
1
2
Our Matrix funds are a range of equity funds which
come with extra governance to ensure they continue to
behave as you first expected. With clear risk categories
and equity sectors each fund is monitored by our
Investment Advisory Committee to ensure it does not
veer from these set criteria. Under some circumstances
this governance process may lead to a change of the
Sector
Core (<1%)*
The indicated funds can be used to replace the default equity content, RLP Global
Managed Pension fund, of our Governed Portfolio options. Further details or our
Governed Portfolio options can be found on pages 14 and 15 of this guide.
6
The indicated funds are part of our Matrix fund offering and come with an extra
layer of governance. Further details on these Matrix funds can be found on the
following page.
7
Please note the underlying investment of this fund changed on 7 May 2010.
8
Please note the underlying investment of this fund changed on 19 October 2009.
9
Please note the underlying investment of this fund changed on 3 May 2011.
10
Please note the underlying investment of this fund changed on 28 November 2011.
11
Please note the underlying investment of this fund changed on 14 December 2012.
Please note the underlying investment of this fund changed on 26 May 2014.
12
The following table shows the funds that currently populate
the Matrix, within their risk category and equity sector.
Core Plus (1–5%) *
Close TEAMS UK Equities (1%),
UK Equity
BlackRock Aquila UK Equity Index
Close TEAMS UK Equities (2%),
Schroder Core UK Equity
Schroder UK Equity
UK Income
Artemis Income
UK Mid Cap
Global Managed Equity
Europe
US
Japan
Asia Pacific
Emerging Markets
Artemis UK Special Situations,
Invesco Perpetual UK Growth,
Schroder UK Alpha Plus
Fidelity MoneyBuilder Dividend
Franklin UK Mid Cap
UK Small Cap
Global Blend
Specialist (>5%) *
Investec UK Smaller Companies
BlackRock Aquila Global Blend
Rathbone Global Alpha
Invesco Perpetual Global Equity,
BlackRock Aquila Global Equity Index (60:40)
Investec Global Free Enterprise
BlackRock Aquila European Equity Index
Fidelity European Blended
Neptune European Opportunities
BlackRock Aquila US Equity Index
Fidelity American
JP Morgan US
Schroder Tokyo
Invesco Perpetual Japan
Invesco Perpetual Asian,
Stewart Investors Asia Pacific Leaders
JPM Emerging Markets
Stewart Investors Global Emerging Markets
Leaders - closed to new business
* Our three categories of risk are Core, Core Plus and Specialist and we have used a measure called “tracking error” to determine these categories. “Tracking error”
is a figure that tells us how close the performance of the fund is to its benchmark. In general terms the greater the tracking error the more risk the fund manager
is taking. Consequently the greater the potential risk and reward for investors in these funds. For the purposes of the Matrix, the “tracking error” is an annualised
measurement over rolling 36-month periods and this is updated every month. Further details on the governance and the review process surrounding the Matrix
funds can be found in our Matrix Consumer Guide.
27
The next step
We hope you’ve found this guide useful. If after reading
it you’re still unsure of what to do, speak to a financial
adviser who’ll be able to help you select an investment
that’s suitable for you.
Advisers may charge for providing such advice and
should confirm any costs beforehand.
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April 2017
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