The ABI is a trade body that represents the insurance industry. It maintains ranges of investment fund sectors (see below) to facilitate comparisons between similar unit-linked funds.
These sectors allow advisers and investors to make like-for-like comparisons between unit-linked funds which invest in, or can potentially invest in, broadly comparable assets.
Funds in this sector must meet the following conditions:
Notes to definitions
* Delivery by value "DBV" and Bilateral comprised of Unstripped British Government Stock, Treasury Bills and Bank of England Bills priced on a mark to market basis.
** References to UCITS should be read as applying to Life and Pension funds for the purposes of these definitions.
***Managers are expected to ensure that instruments have been awarded one of the two highest short-term credit ratings of the principal credit ratings agencies.
Funds in this sector must aim to generate or pay out income for investors.
The funds in this sector are expected to have a range of different investments. However, the fund manager has significant flexibility over what to invest in. There is no minimum or maximum requirement for investment in company shares (equities) and there is scope for funds to have a high proportion of shares. The manager is accorded a significant degree of discretion over asset allocation and is allowed to invest up to 100% in equities at their discretion:
Funds in this sector are required to have a range of different investments. Up to 35% of the fund can be invested in company shares (equities). At least 45% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or "cash" investments. "Cash" can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
* The definition for each sector shows how much flexibility the fund manager has over the range of investments in a fund. Funds in these sectors can hold a mix of investments which typically include company shares, bonds, "cash" and commercial property. Managers may use a range of different investment strategies.
The sectors are not designed to reflect the risk of individual funds.
The names of the Mixed Investment sectors show the maximum and minimum amount that funds within each sector may invest in company shares. This includes investments that give an exposure to shares, for example, a derivative that gives exposure to any major established index provider.
The sectors group together funds that are broadly similar, in line with the definitions. The criteria for the sectors overlap, to give managers flexibility. This means that a fund may sometimes meet the requirements of more than one of the sectors.
Funds in this sector are required to have a range of different investments. The fund must have between 20% and 60% invested in company shares (equities). At least 30% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or "cash" investments. "Cash" can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
* The definition for each sector shows how much flexibility the fund manager has over the range of investments in a fund. Funds in these sectors can hold a mix of investments which typically include company shares, bonds, "cash" and commercial property. Managers may use a range of different investment strategies.
The sectors are not designed to reflect the risk of individual funds.
The names of the Mixed Investment sectors show the maximum and minimum amount that funds within each sector may invest in company shares. This includes investments that give an exposure to shares, for example, a derivative that gives exposure to any major established index provider.
The sectors group together funds that are broadly similar, in line with the definitions. The criteria for the sectors overlap, to give managers flexibility. This means that a fund may sometimes meet the requirements of more than one of the sectors.
Funds in this sector are required to have a range of different investments. However, there is scope for funds to have a high proportion in company shares (equities). The fund must have between 40% and 85% invested in company shares.
* The definition for each sector shows how much flexibility the fund manager has over the range of investments in a fund. Funds in these sectors can hold a mix of investments which typically include company shares, bonds, "cash" and commercial property. Managers may use a range of different investment strategies.
The sectors are not designed to reflect the risk of individual funds.
The names of the Mixed Investment sectors show the maximum and minimum amount that funds within each sector may invest in company shares. This includes investments that give an exposure to shares, for example, a derivative that gives exposure to any major established index provider.
The sectors group together funds that are broadly similar, in line with the definitions. The criteria for the sectors overlap, to give managers flexibility. This means that a fund may sometimes meet the requirements of more than one of the sectors.
Funds in this sector must meet the following conditions:
Notes to definitions
* Bonds with a maturity of less than three months are treated as cash.
** References to UCITS should be read as applying to Life and Pension funds for the purposes of these definitions.
***Managers are expected to ensure that instruments have been awarded one of the two highest short-term credit ratings of the principal credit ratings agencies.
Funds which predominantly invest in property and do not meet the requirements of the UK Direct Property sector. To invest "predominantly" in property that is not UK direct property, funds must:
Notes to definitions
Flags include; multi-manager, socially responsible, duration-long (life funds only) and duration short funds.
Notes to definitions
Flags include; multi-manager, socially responsible, duration-long (life funds only) and duration short funds.
Notes to definitions
Flags include; multi-manager, socially responsible, duration-long (life funds only) and duration short funds.
Funds that do not provide sufficient data to be monitored and consequently cannot be compared on a like for like basis. Funds may also have one or more of the following characteristics: