The fund has two aims:
- To provide a growing level of income over three years by investing in a mix of assets from around the world
- To provide capital growth over five years or more
Investment policy and strategy
Core investment: The fund is typically invested in a mix of assets, including company shares, bonds, convertibles and currencies. It may also invest in property through other funds.
Other investments: Generally, less than 10% is held as cash or assets that can be turned into cash quickly. Such assets may be held to back the fund’s use of derivatives.
Use of derivatives: The fund is typically invested directly in assets, but derivatives may be used to invest indirectly. Derivatives may also be used to reduce risks and costs and to manage the impact of changes in currency exchange rates on the fund’s investments.
Strategy in brief: The fund has a flexible investment approach with the freedom to invest in different types of assets in response to changes in economic conditions and the valuation of assets. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of market reactions to events to identify investment opportunities. The fund manager holds at least 70% of the fund in euro assets.
Bonds: Loans to governments and companies that pay interest.
Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.
Derivatives: Financial contracts whose value is derived from other assets.
Risks associated with the fund
The value of investments and the income from them will rise and fall. This will cause
the fund price, as well as any income paid by the fund, to fall as well as rise. There
is no guarantee the fund will achieve its objective, and you may not get back the
amount you originally invested.
The fund may use derivatives with the aim of profiting from a rise or a fall in the
value of an asset (for example, a company’s bonds). However, if the asset’s value
varies in a different manner, the fund may incur a loss.
Changes in currency exchange rates will affect the value of your investment.
If the share class is hedged (H share class), it aims to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders of the hedged share class from benefiting if the hedged share class currency falls against the euro.
Where market conditions make it hard to sell the fund’s investments at a fair price
to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s
Some transactions the fund makes, such as placing cash on deposit, require the
use of other financial institutions (for example, banks). If one of these institutions
defaults on their obligations or becomes insolvent, the fund may incur a loss.
The Fund allows for the extensive use of derivatives.