What is a unit-linked fund?
A unit-linked fund invests in many individual assets (another word for investments), which are owned by Zurich. These funds are split into units. When you invest in a fund, you buy units, and when you take some or all of your money out, you sell units. The number of units you have helps to work out the value of your plan, based on the terms and conditions.
Unit-linked funds can include things like cash, shares (called equities), fixed interest securities (e.g. bonds and some cash-like instruments), property, and sometimes other unit-linked funds. The mix of these assets depends on the objective of the fund.
Unit-linked funds use pooled investments. This means that lots of people’s money is combined, allowing everyone to benefit from a wider variety of assets than they could buy on their own. This helps to spread the risk and lets investors benefit from expert investment managers.
What is Zurich’s role?
Zurich aims to make sure the range of funds in our plans meets your needs and expectations.
If we set the fund’s investment strategy, we make sure it is managed in line with its stated objective.
If your fund invests in an external fund, we do not control how it is managed and are not responsible for decisions made by those fund managers.
However, we still check important things like performance and volatility (how much the price moves over time) to make sure everything is on track.
We also look after your day-to-day service needs, such as answering your questions and sending you regular personalised statements about your plan’s value.
What does a fund manager do?
Zurich works with fund managers to offer lots of investment choice.
A fund manager’s job is to choose the best places to invest the fund’s money to reach its goals, following the rules set out for each fund.
You can find details about what each fund aims to do, and how the fund manager invests its money, in the fund factsheet.
A word about risk
Different funds invest in different types of assets, and each comes with its own level of risk. Usually, higher potential returns mean higher risks, which could lead to your investment going down in value. Find out more information on the risks involved with investing.
Before choosing a fund, make sure you understand its goals, what it invests in, and how the fund manager will look after it. If you don't have one, visit MoneyHelper to understand the different kinds of advice available and how to find an adviser local to you. You'll usually have to pay for any advice you receive.
Valuation of funds
How are unit-linked funds valued?
Unit-linked fund valuations reflect what its underlying investments are worth in today’s market. This involves the use of expert judgement.
For equities and most fixed interest securities, we normally use the prices shown on official markets, like the London Stock Exchange.
If the fund owns property, such as land or buildings, an independent expert checks how much these are worth at least once a year. After that, the value is updated at least every month using a commercial property price index as a guide.
We also add any income the fund earns, like interest from cash or rent from property. Then, we take away any charges, expenses, and tax that are needed. This gives us the final value of the fund.