A guide to unit-linked funds
How we manage your investment
Contents
Introduction
Most Zurich plans use unit-linked funds
At Zurich, we know how important it is for you to trust us. We work hard to earn that trust by giving you clear and easy-to-understand information about what happens to your money. These pages are one way we show our commitment to doing this.
These pages explain how unit-linked funds work. By the time you’ve read these pages, you should understand how we look after your investment. You will also learn what affects the decisions we make.
We have some main rules that we follow when managing unit-linked funds. How we use these rules might change, depending on the situation. These pages does not include detailed information about any particular plans or funds. For more specific information, please check other documents like key features, terms and conditions, fund guides, or factsheets - manage my investment and manage my pension also have more information.
One important rule is that we always manage unit-linked funds according to the plan’s terms and conditions. If there is ever a difference between what these pages says and what your plan documents say, the plan documents are the ones we follow.
Treating customers fairly
Another important rule is that we will act in good faith to strive to create good customer outcomes. Unit-linked funds usually include money from lots of customers. We make sure we think about everyone’s interests when we manage these funds.
Sometimes, we might need to check how a single transaction or several transactions could affect the whole fund and all its customers before we complete them.
If there is ever a conflict of interest between customers who want to join or leave a fund, and those staying in it, we will usually put the interests of those staying first.
Who at Zurich manages unit-linked funds?
Our aim is to ensure that all prices, in all funds, are calculated fairly. There are a number of ways we oversee operations to achieve this.
The Board of Zurich Assurance Ltd is accountable for making sure unit-linked funds are managed properly.
Our UK Life Chief Financial Officer (CFO) has overall responsibility for the oversight of unit-linked funds. The Asset and Liability Management Investment Committee helps the CFO oversee the management of investments. This includes:
- Approving the appointment of the fund managers, unless further Board approval is needed
- Deciding the investment policy for assets in unit-linked funds
- Making sure the investment policy is followed
The UK Life CFO also leads the Unit Pricing Committee, which is responsible for:
- Considering the standards, methods, and calculations for unit pricing
- Managing risks in pricing
- Controlling the unit pricing process
- Reviewing where we use judgement (called ‘discretion’)
What is discretion?
Good management of unit-linked funds sometimes needs expert judgement. We call this ‘discretion’. We only use discretion in special cases and within clear limits. On these pages, you will see some examples of how and when we use discretion.
What is a unit-linked fund?
When investing in a unit-linked fund you are putting your money together with other people. The fund uses everyone’s money to buy things like cash, shares, property or bonds, which helps spread the risk and gives you more choice.
Expert fund managers decide what to invest in and aim to grow your investment over time.
Remember, all investments have some risk. It’s important to know what a fund does and the risks involved before you decide to invest in it.
Unit pricing
After calculating the value of a fund Zurich divides it into units and gives each unit a unit-price. The value of your investment depends on how many of these units you hold.
Buying and selling units
When you ask Zurich to buy or sell units in your fund, we try to do this as soon as possible. Sometimes, we may delay acting on your instruction to ensure we treat all customers fairly.
If you want to move your money from one fund to another, most Zurich plans let you do this. Switching funds can help make sure your investments match your goals, and there are usually no charges for switching.
Expenses and charges
Zurich has to pay for things like looking after your investment plan (plan expenses) and managing the fund (fund expenses).
These charges can reduce the number of units you own or the value of each unit you hold in a fund.
Sometimes, the costs and charges might change in the future, for example if laws or rules change, or if fund managers increase their charges to us.
Closing or merging funds
Sometimes, Zurich needs to close a fund or merge it with another fund. This is a decision we make carefully and our aim is to move your investment into a reasonably similar fund. Where possible we will let you know in advance.
