Fixed and variable interest investments are Bank Deposits and Securities issued by governments, companies or financial institutions where the fund receives a fixed or variable rate of interest. Their value and attractiveness to buyers and sellers may change as market conditions change. The Fixed Interest securities held by the fund are as follows:
Fixed and variable interest
As at 31 December 2011
|
Fixed interest securities guaranteed by the UK government ("Gilts") 1 |
66% |
|
Other fixed interest securities guaranteed by other governments which are approved securities for the purposes of our regulatory returns 1 |
7% |
|
Other fixed interest securities, eg fixed interest Bonds issued by companies 2 |
27% |
Notes
1These have a fixed repayment date and amount. Their present value will change with changes in expected interest rates to the repayment date. Because these are loans to governments, their repayment is relatively secure.
2These are loans to Companies with a fixed end date. The Companies we lend to have a good credit rating, so the risk of default is minimised although it can't be eliminated.
UK Shares and options
These are shares in companies, most of which are based in the UK. The companies and the amount we invest in them change from time to time as the fund manager aims to maximise returns. The value of company shares can change significantly over short periods. To give this part of the funds some protection, against share prices falling significantly, we may use or buy options that allow us to sell shares at a specified price. In 2011 these options reduced the fund's return by 0.5%. We regularly review the extent of the protection we arrange to take account of the expected cost against the potential gains should markets rise.
At 31 December 2010 the top 10 holdings were:
|
Royal Dutch Shell B Shares |
3,429 |
1.32% |
|
GlaxoSmithKline |
3,159 |
1.22% |
|
BP Amoco |
2,611 |
1.00% |
|
British Gas Group |
2,399 |
0.92% |
|
Vodaphone Group Ord U |
2,297 |
0.88% |
|
Rio Tinto (Reg) |
1,959 |
0.75% |
|
British American Tobacco |
1,756 |
0.68% |
|
HSBC Holdings |
1,624 |
0.62% |
|
Standard Chartered |
1,388 |
0.53% |
|
Astrazeneca |
1,356 |
0.52% |
Cash
Cash is held to cover our ability to meet claims payments as and when they fall due. If is mostly held in the short-term accounts with UK banks. The interest we receive is based on money market indices such as London Interbank Offered Rate (LIBOR).
