Download Standard Life Global Absolute Return Strategies Fund

Standard Life
Global Absolute Return
Strategies Fund
Contents
03
04
06
07
08
09
10
Introduction to Global Absolute Return
Strategies Fund
How does GARS work?
Who looks after your money?
4 reasons to consider GARS
Why choose Standard Life?
About Standard Life Investments
Important things to consider
“ Make hay even when
the sun doesn’t shine.”
Standard Life
Global Absolute Return
Strategies Fund
The Standard Life Global Absolute Return Strategies
(GARS for short) fund is an absolute return fund. It
doesn’t aim to match or track a market or similar
benchmark. Instead, it aims to make money also when
markets are going down, as well as when they are going up.
It also means GARS can help your money to grow
smoothly as it aims to iron out short term fluctuations
in markets.
It has a target return of cash* +5% per annum (gross of
charges) over rolling three year periods.
This means that over any given three year period, we
would expect the average yearly return to be 5% greater
than the return available on cash* over that period (before
charges) although remember this isn’t guaranteed.
Talk to your financial adviser about how GARS can help
meet your long term savings or pension goals.
* As measured by the six month European Interbank Offer Rate (Euribor)
Warning: If you invest in this fund you may lose some or all of the
money you invest.
Warning: The value of your investment may go down as well as up.
Warning: This investment may be affected by changes in currency
exchange rates.
Global Absolute Return Strategies Fund
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How does
GARS work?
GARS aims to grow your investment more smoothly than traditional
investment funds such as a Managed Fund. To achieve this, GARS is
designed with the potential to make money in all market conditions
including times when markets are falling.
To make this possible, GARS has a wide choice of investments
which spreads the investment risk and making GARS more
resilient during times when markets are unsteady.
At the same time it uses a much wider range of tools and
techniques to achieve its objective.
Importantly, these tools and techniques allow the fund to invest
so that, even if market prices fall, the fund still has the potential
to make money.
What does GARS invest in?
The fund uses a combination of traditional assets (such as
equities and bonds) and investment strategies based on advanced
derivative techniques, resulting in a highly diversified portfolio.
Split of strategy grouping by risk contribution at 30 June 2015
Equities
Foreign Exchange
Duration
Stock selection
Credit
Volatility
Source: Standard Life Investments
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Global Absolute Return Strategies Fund
Description of strategy groups
Below are the descriptions of the strategy groups that GARS
may hold.
Equities – Offers the potential to achieve long term reward for
investors. The Fund may hold a diversified range of direct equity
investment as well as market index derivatives to benefit from
absolute and relative performance opportunities.
Foreign Exchange – GARS has the potential to profit from
movements in global currencies using currency forwards and
other derivatives.
Duration – Strategies that exploit movements up or down the
interest rate curve are often accessed through government bond
or interest rate derivatives.
Stock selection – The Fund aims to add value to performance
though active management from Standard Life Investments’
fund managers.
Credit – Corporate bonds issued by companies generally offer
higher yields than government bonds to compensate the higher
default risk.
Volatility – There are numerous derivative strategies available
for taking advantage of increases or decreases in the volatility
of markets.
Property – The Fund may hold property investments in both listed
property companies and property index derivatives.
Inflation – The Fund may invest in strategies that exploit
movements in inflation in different markets. These may be accessed
through index-linked government bonds or inflation derivatives.
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Who looks after
your money?
A team of over 40* skilled investment professionals at
Standard Life Investments look after GARS
The team managing GARS
Strategists
Investment
managers
The GARS
team is split
into three
groups.
These groups
work closely
together to
choose the
right
investments
for GARS.
Risk
experts
Strategists
The job of the strategists is to
give advice on ‘big picture’ world
developments that might affect
our investment decisions (for
instance, how unrest in the
Middle East might affect the
price of oil).
Investment managers
The investment managers find
their ideas from many different
sources; for instance, from the
findings of the strategists or
from our equity, bond and
currency experts.
The investment managers
thoroughly analyse each idea
before they consider it for GARS.
They use their own tried and
tested methods to help them find
good investments. They
continually check the investments
they already hold, to make sure
each one is still suitable for
GARS.
Investment risk experts
The aim of the risk experts is to
ensure that the investments
choosen for GARS give you as
smooth an investment journey
as possible.
* Source: Standard Life Investments 30 September 2015
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Global Absolute Return Strategies Fund
4 reasons to
consider GARS
1
GARS aims to make money in all
market conditions
GARS uses a wide range of investment tools and techniques. The
managers can use these carefully and skilfully to help make money
even if markets are falling.
2
Increased diversification
3
Easy access
4
An asset manager you can trust
By putting your money in a lot of different markets and types of
investment the risk is spread much further. In otherwords, GARS
puts your eggs in many different baskets.
GARS is priced daily so you can buy, sell or switch units on the
same basis as for any fund.
Standard Life Investments is a leading asset manager,
managing €352 billion^ on behalf of clients worldwide.
A team of over 40 skilled investment professionals takes care of
your investment in GARS. For more on Standard Life Investments
see page 9
^ Source: Standard Life Investments 30 June 2015
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Why choose
Standard Life?
Standard Life is a leading long-term savings and
investments company with around 4.5 million
customers, trusting us to manage over €425
billion* of their assets everyday.
Established in Scotland in 1825 and headquartered
in Edinburgh, it’s one of the biggest companies
listed on the London stockexchange.
Here in Ireland, the company has been operating
since 1834 and has been helping generations of
Irish customers plan for their future.
* As at 30 June 2015
Your policy is protected
Standard Life in Ireland operates as a branch of our
UK parent company. This means that any policies
taken out since 1 December 2001 are covered by
the UK’s Financial Services Compensation Scheme
(FSCS) in the event that Standard Life is in default.
So if you invest in a Standard Life pension or
investment policy, 100% of the claim is covered,
with no upper limit.
There is no equivalent Irish compensation scheme.
For information on FSCS cover, see Your policy is
protected (FSCSFAQ).
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Global Absolute Return Strategies Fund
About
Standard Life Investments
Strong and market
leading
Taking care of your money
Standard Life Investments is a
leading asset manager, who
manage €352 billion* on behalf
of clients worldwide.
Talented people
At the heart of their success is
over 1,500* investment
professionals and support staff
working for them around the
world. They spend a lot of time
and energy recruiting and
keeping the best and most
talented people.
* As at 30 June 2015
They thoroughly research and
analyse each investment idea
before they add it to any of our
funds. They use their own tried
and tested methods to do this.
Their aim is to constantly look
ahead to anticipate change, so
that they can deliver the best
rewards for our investors.
Global reach
Their headquarters are in
Edinburgh and they have offices
in Boston, Hong Kong, London,
Beijing, Sydney, Dublin, Paris
and Seoul. They also have close
links with leading investment
companies in India and Japan.
A decision to invest should not
be based on the information
within this document. Please talk
to your financial adviser for more
information, or if you need an
explanation of the terms used.
For the latest performance of
GARS, please see the GARS Fund
factsheet (FFS_OJ).
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Important things
to consider
This Fund is not guaranteed,
not a capital protected product
and not a substitute for cash
or deposits.
The Fund can invest in a wide
variety of investment strategies
and assets. Below we document
the specific or heightened risks
applicable to this fund rather
than an exhaustive list.
Extensive use of derivatives
* As measured
by the six
month
European
Interbank Offer
Rate (Euribor)
In order to achieve its objectives
an absolute return fund utilises a
combination of traditional
investments (such as equities,
bonds and foreign exchange) and
advanced techniques where it
can use derivatives extensively.
Derivatives are financial
instruments which derive their
value from an underlying asset,
such as a share or bond, and
are used routinely in global
financial markets. Used carefully,
derivatives offer an effective and
cost-efficient way of investing in
markets. However, derivatives
can lead to increased volatility
of returns in a fund, thus
requiring a robust and extensive
risk management process.
While the Fund will not borrow
cash for investment purposes,
the total value of exposures to
markets will routinely exceed
the Fund’s net asset value.
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Global Absolute Return Strategies Fund
Derivatives may be Exchange
Traded or Over the Counter (OTC).
Counterparty risk
The Investment Manager may
use one or more separate
counterparties to undertake
derivative transactions on behalf
of the Fund. From time to time
the fund may be required to
pledge collateral, and when this
is required it will be paid from
within the assets of the Fund.
When a derivatives contract
moves in favour of the Fund there
is a risk that the counterparty
may wholly or partially fail to
honour their contractual
obligations under the
arrangement. The Investment
Manager assesses the
creditworthiness of
counterparties as part of the risk
management process and will
ordinarily hold collateral to
mitigate this.
Use of ‘short’ and ‘long’
positions
The Fund, by employing certain
derivative techniques, will
establish both ‘long’ and ‘short’
positions in individual stocks
and markets. Investing on a
‘long’ basis means that the value
of the derivative will rise or fall in
the same direction as the
underlying market value of the
asset from which it is derived.
If investments are made on a
‘short’ basis the value of the
derivative will rise and fall in the
opposite direction to the
underlying market value of the
asset from which it is derived.
exhibit closer correlation for
example, move in the same
direction as one another, the
fund may be subject to a higher
level of risk and volatility than
anticipated.
Active Fund Management
You should consider GARS
if you:
The majority of risks within
traditional funds are driven by
the type of investments held
(equities, fixed interest or
property, etc). The risks that
fund management decisions
add are generally of a smaller
magnitude than those of the
asset types themselves.
However, the GARS fund doesn’t
have a structure where most of
the returns are generated from
traditional asset types. Rather, it
derives most of its returns from
very specific strategies. As a
result of this the risks of the fund
are driven primarily by these fund
management decisions, and less
by the characteristics of the
underlying traditional asset types.
Correlation
The fund will invest in a diverse
set of investment strategies,
which in the opinion of the
investment adviser have
attractive risk reward
characteristics. While the
breadth of the strategies is
significant, should they start to
¬wish to invest in a fund that
aims to provide positive
investment returns in all
market conditions
¬wish to invest in a fund which
has a target return of cash*
+5% per annum (gross of
charges) over rolling three year
periods
¬are looking to form the core
element of a portfolio or
diversify an existing portfolio
However, GARS is not suitable
if you:
¬do not wish to take any risk
with your capital
¬have a short term investment
time horizon
¬do not wish to invest in a fund
that uses financial derivatives
or the advanced investment
strategies used by GARS
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Pensions
Savings
Investments
Find out more
Talk to your financial adviser they’ll give you the information you need.
Also, you can call us or visit our website
(01) 639 7000
Mon-Fri, 9am to 5pm. Call may be monitored and/or recorded to protect
both you and us and help with our training. Call charges will vary.
www.standardlife.ie
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Standard Life Assurance Limited is authorised by the Prudential Regulation Authority in the UK and is
regulated by the Central Bank of Ireland for conduct of business rules. Standard Life Assurance Limited
is registered in Dublin, Ireland (905495) at 90 St Stephen’s Green, Dublin 2 and Edinburgh, Scotland
(SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.
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