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Funds to invest in

Select Investment from Aviva

Full range of funds

This information is designed to help you understand more about saving and investing before you make any decisions and not to provide you with financial advice.

If you have any doubts about the suitability of a product or fund you should seek financial advice. If you don't have a financial adviser you can find an adviser in your area at www.unbiased.co.uk. Where advice is provided there may be an additional cost to you.

With Select Investment, you can choose to invest in up to 10 funds. We have a wide range of professionally managed funds available to you. You can view our range of funds by visiting our Fund Centre .

With so many funds, you’re bound to find something that suits you. You can invest for growth, income or a combination of both. As you go through different stages in your life, you’ll probably find that your needs change. We won't charge you to switch your money between funds.

Different types of funds

To make it easier for you to see exactly what’s what, we’ve split our funds into categories. Here’s a quick rundown of the different categories:

Cash/Money market
  • Cash/Money market funds are lower risk investments aimed at giving similar growth to bank/building society interest rates.
  • Although this is the least risky of the asset types, these funds can still fall in value. They invest in cash and cash alternatives.
  • Cash means a range of short-term deposits – similar to a bank/building society account.
  • Cash alternatives are money market securities, which are interest generating investments, issued by governments, banks and other major institutions.
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
Corporate bonds
  • Corporate bonds are issued by UK and international companies as a way for them to borrow money. The company pays interest on the loan and promises to repay the debt at a certain point in time.
  • They are seen as riskier investments than gilts, which are loans to the UK government. This is because companies are more likely to fail to repay the loan than the UK government. However, they often offer a higher rate of return to balance out this higher risk.
  • The highest risk bonds tend to offer the highest potential returns; these are known as high yield bonds.
  • A corporate bond fund will usually invest in a range of bonds which means you’re spreading the risk in case one company can’t pay back the money it owes.
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
Distribution
  • Distribution funds aim to provide a regular income.
  • They invest in income-generating assets like shares that pay dividends; corporate bonds that pay interest; and commercial (business) property that receives rental income.
  • You receive the income produced by the fund, minus any fund charges.
  • The value of your investment and the income you get from it can go down as well as up and you may not get back what you originally invested.
Equities
  • Equities are shares in companies listed on stock exchanges around the world.
  • As shares can rise and fall in value very easily, equities are riskier than most other investments. However, they usually offer the greatest chance of higher returns over the long term.
  • Some funds invest only in certain countries, while others invest in companies from all over the world. Others only invest in certain types of company, such as technology companies. Generally, the more specialised the fund is, the higher the risk to your investment.
  • The value of your investment can go up or down, often changing quickly and by significant amounts, and you may not get back what you originally invested.
Ethical
  • Funds where the choice of investments is influenced by social, environmental or other ethical criteria.
  • Some of these funds undertake ethical screening to meet their investment aims because they are unable to invest in certain sectors and companies. This may mean that they are more sensitive to price swings than other funds.
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
Gilts
  • Gilts are bonds issued by the UK government as a way for them to borrow money, usually for a fixed term. The government pays interest on the loan.
  • As they are issued by the UK government, they are generally seen as lower risk investments than bonds issued by companies (corporate bonds).
  • As gilts can be bought and sold on the open market, their value can rise and fall.
  • The value of your investment can go down as well as up and you may not back what you originally invested.
Global bonds
  • Global bond funds are funds which invest in bonds issued by companies (corporate bonds) and governments from around the world.
  • The value of your investment can go down as well as up and you may not back what you originally invested.
Guaranteed funds

We have a range of funds that offer different levels of guarantees. Here’s a brief overview of them:

Guaranteed funds

The guaranteed funds offer a fifth anniversary guarantee on a percentage of your original investment into the fund. Any withdrawals or switches out of the guaranteed funds before the fifth anniversary will reduce the guarantee in proportion to the number of units cancelled, rather than the cash amounts taken from the fund. In this event, you may not get back the full amount of your original payment into the fund.

Guaranteed 100 Fund

At the fifth anniversary, you’ll get back at least the amount you invested, less any money you’ve withdrawn or moved out of the fund.

Guaranteed 90 Fund

At the fifth anniversary, you’ll get back at least 90% of the amount you invested, less any money you’ve withdrawn or moved out of the fund.

Guaranteed 80 Fund

At the fifth anniversary, you’ll get back at least 80% of the amount you invested, less any money you’ve withdrawn or moved out of the fund.

The funds invest in a mix of assets including equities. The proportion of your money invested in equities provides most opportunity for your investment to grow. The value of equities can go down as well as up depending on market conditions. If the market goes down, the fund manager will sell equities to make sure the value at the fifth anniversary doesn’t go below the guaranteed amount. Similarly, if the markets go up, the fund manager may increase the equity proportion, so increasing the potential for growth. In short, as market conditions change during the five-year period, so will the proportion of equities in the fund, which could limit the growth potential.

On the fifth anniversary you can choose to:

  • reinvest into another fund (including a new guaranteed fund)
  • cash in your bond and invest in another product, or cash in your bond and take the money
Mixed asset
  • Mixed asset funds invest in a range of assets such as equities, corporate bonds, gilts, property and cash.
  • The diversification offered by these funds helps spread the risk to your money. If one type of asset falls in value, another type may offset that reduction in value by performing well. In that way, it’s possible that the overall value of your investment may not fall.
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
Property
  • These funds invest mainly in commercial property, such as shopping centres and business offices. They may also invest in indirect property investments, including quoted property trusts and unregulated collective investment schemes.
  • The funds may also hold geared investments. With these, the investment manager borrows money to boost potential growth and income. The manager repays the loan from the returns and uses the remaining returns to increase profits for investors. Geared investments can carry a higher degree of risk than normal investments and can also fall sharply or suddenly in value.
  • A valuer’s opinion often decides the value of property investments and it may not be possible to sell property investments immediately. That means there could be a delay if you want to move all or part of your investment out of funds investing in property. We may have to delay payments, or transferring or moving your money for up to six months.
  • If a property fund invests in a collective fund which suspends trading, the property fund may hold more cash than usual until the underlying collective fund begins trading again. This could restrict growth potential as cash investments have less potential for growth than property investments.
  • The value of your investment and any income from it can go down as well as up and you may not get back what you originally invested.
Specialist/Other
  • This type of investment covers funds that don’t fit into the other fund types described previously. For example, they may invest in assets such as infrastructure, commodities, derivatives and hedge funds or may be free to invest in any asset type at any time.
  • Each fund in this group will invest differently, so you should check its fact sheet for the fund objective, risk rating and asset details.
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
Tracker
  • These funds aim to perform in line with a particular index, for example the FTSE All-Share Index. They are often referred to as passive rather than active managed funds.
  • Funds can track the index in three main ways and more than one method may be used. The fund can try to:
    • hold the same assets as the index in the same proportions
    • decide on a selection of holdings to still closely mirror the index performance, and/or
    • use derivatives. (Derivatives are a financial contract whose value is based, or derived from, a traditional security or asset (stock, bond or commodity) or a market index.)
  • The value of your investment can go down as well as up and you may not get back what you originally invested.
With-profits
  • This is a special type of mixed asset investment. It shares the profits and losses of a with-profits fund with investors through a system of bonuses. Your payment buys units in a with-profits fund. For most with-profits funds, the price of these units increases with the addition of regular bonuses.

  • The aim of a with-profits fund is to spread out profits or losses from one year to the next. This is called ‘smoothing’ and is unique to with-profits investments. Smoothing means you’re likely to see a steadier return year on year, rather than watching the value of your investment regularly rise and fall in line with stock markets.

    As a result of smoothing, the investment risk on a with-profits fund is lower than investing directly in the same stocks and shares or property.

  • However, we may have to make a market value reduction if you take money out of a with-profits fund. This could happen where there’s been a large or sustained fall in stock markets or when investment returns are below the level we normally expect. This reduces the value of your investment. We apply a market value reduction to make sure all our customers receive a fair share of the returns earned over the period of investment.

  • The value of your investment can go down as well as up and you may not get back what you originally invested.

You can find a simplified explanation of how the Aviva With-Profit Fund works in our brochure A guide to your with-profits investment and how we manage our With-Profit Fund (PDF 501KB).

Your financial adviser should be able to give you a copy.

Our Principles and Practices of Financial Management (PPFM) provides more detailed technical information about how we manage our With-Profit Fund.

Please get in touch with us or your financial adviser if you’d like a copy. Alternatively, you can download one from our website aviva.co.uk/ppfm.

Need more help?

You need to speak to a financial adviser to apply for Select Investment. An adviser will be able to help you decide if this is the right investment for you and go through the application process.

If you don't have a financial adviser you can find an adviser in your area at unbiased.co.uk. Where advice is provided there may be an additional cost to you.

Talking to an adviser? Use our checklist

We have a checklist of topics that we think you should cover when you talk to a financial adviser.

Adviser discussion checklist (PDF 146KB)

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