Norwich Union revamps funds of funds

Article date: 4 October 2004

Manager will be able to invest in more than 1,900funds

Norwich Union is improving its range of funds of funds byadopting a more flexible approach to investment.

It is switching its funds of funds from a fettered tounfettered* investment style. This means the fund manager will beable to pick investments from a selection of more than 1,900 funds.Previously they could invest only in a selection of about 80 fundsavailable through the Portfolio investment bond. The change will beintroduced on 11 October.

Norwich Union offers three funds of funds through Portfolio: theNU Balanced Funds of Funds, NU Cautious Fund of Funds, and NUGrowth Fund of Funds. These are managed on a day-to-day basis byInvestment Manager Selection Ltd (IMS), which selects and monitorsunderlying investments.

Removing the fettered constraints and giving IMS greaterinvestment freedom should have a positive effect on future fundperformance without increasing the risk profile of the funds.

Neil Davies, head of investment product development, said:"Funds of funds are a core part of the Norwich Union range ofinvestments and this enhanced proposition is now available throughonshore and offshore bonds and some pension products."

He added: "This is good news for our customers and IFAs. Movingfrom a fettered to an unfettered investment style means ourcustomers will be able to invest in an even wider choice offunds.

"Funds of funds are a good choice for many customers becausethey allow them to diversify their investments across a wide rangeof sectors and markets. There is a huge range of funds andmanagement styles to choose from and for some of our customers itis a good idea to leave picking the best one in each sector to theprofessionals.

"By investing in a wide range of different funds, the funds offunds can achieve greater diversification. This can help reducerisk while producing consistent performance."

-ends-

Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
Rob Pell 01904 452659 Out of hours 07968 934091
Louise Soulsby 01904 452617 Out of hours 07810 057262
James Evans 01904 452791 Out of hours 07790 487105

Notes to editors

  • Norwich Union is the UK's largest insurer. It is the UK'slargest provider of life, pensions and investment products and oneof the leading IFA providers. IFAs provide around 75% of thecompany's long-term savings business in the UK
  • Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group. Norwich Union’s newsreleases and a selection of images are available from Aviva'sinternet press centre at www.aviva.com/media.

About Portfolio
*A fettered fund of funds can invest only in a restricted range offunds. An unfettered fund of funds can invest in an unrestrictedrange of funds.

Portfolio offers a flexible way to invest for growth or income.Its minimum investment is £5,000 and investors can choose to puttheir money in a selection of cash, bond, property, distribution,equity and with-profit funds, which are run by Norwich Union andother fund managers.

It offers three funds of funds:

Norwich Union Cautious Fund of Funds
Designed for investors seeking a lower risk investment option. Thisfund invests in both equity and bond funds with a greater emphasison bonds that reflects the lower risk characteristics Thefund’s investment policy is diversified and can invest acrossglobal bonds and equity markets, with greater emphasis on bondsthan the Balanced Fund of Funds and the Growth Fund of Funds. Thefund invests in a selection of funds selected by IMS.

Norwich Union Balanced Fund of Funds
Designed for investors seeking a more balanced approach toinvestment. This fund invests in both equity and bond funds with anaim of providing long-term capital appreciation and income. Thefund’s investment policy is diversified and can invest acrossglobal bond and equity markets, with a greater emphasis on equitiesthan the Cautious Fund of Funds and a greater emphasis on bondsthan the Growth Fund of Funds. The fund invests in a selection offunds selected by IMS.

Norwich Union Growth Fund of Funds
The fund is designed for investors who wish to diversify theirinvestment across a range of funds investing in an internationalshare portfolio and are willing to accept the risk of fluctuationsin global security markets. This fund aims to provide long-termcapital growth. The fund’s investment policy is diversifiedand can invest across global bonds and equity markets, with greateremphasis on equities than the Cautious Fund of Funds and theBalanced Fund of Funds. The fund invests in a selection of fundsselected by IMS.

Portfolio also:

  • Offers valuable guarantees - for investments into theWith-Profit Fund, there is a 5th and 10th anniversarymoney-back guarantee. The 5-year money-back guarantee is a specialoffer that can be removed at any time. On the Guaranteed Fund,there is a money-back guarantee on the 5th anniversary
  • Is flexible - offering a wide choice of internal andexternal funds and a choice of two charging structures within asingle bond
  • Funds on offer – offers investors the choice ofincome and growth funds. Investors can choose from a range of 31internal funds and 51 funds managed by 12 industry-renowned fundmanagers

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