MAC Financial - SIPP Managed Accounts Brochure

SIPP Managed Accounts

The MAC Financial SIPP Managed Accounts

The MAC Financial SIPP Managed Accounts (MA) are an

offshore discretionary investment management service

designed to deliver:

The MAs are the default investment choice within the

MAC Financial SIPP. Please also see our separate “SIPP

Guide” for product details.

Seeking Absolute Returns

Above all the Managed Accounts seek to achieve

absolute returns and the management of absolute

portfolio risk. Relative performance comparisons are of

little importance to us and, indeed we believe, often leads

to irrational decision making.

If we or our investment management partners do not

believe an investment can achieve a respectable return

over a one year time horizon, we simply will not

recommend it.

Broad Asset Class Diversification

The Managed Accounts invest in a broad range of asset

classes, introducing a large number of independent

sources of return and risk.

Portfolio theory and statistical analysis demonstrate that

this approach can deliver performance with significantly

reduced volatility, when compared to a traditional

balanced investment approach.

Dynamically Managed

The Managed Accounts uses a highly flexible approach

to asset allocation, designed to exploit macro trends by

significantly tilting the exposure of a portfolio to each

asset class, region, sector or theme throughout the

investment cycle to maximise potential returns and

protect from market volatility.

Discretionary Service

The Managed Accounts are a full discretionary portfolio

management service, operated by our investment

management partner, Capital International Limited.

The Managed Accounts are available as three distinct

strategies, to meet your specific needs.

Target

Returns

Balanced MA

Growth MA

Volatility

Ranges

Cautious MA

8% 10% 13%

6-10% 8-12% 10-14%

Introduction

Exceptional Performance

Highly Personalised Service

Absolute Returns

Strict Risk Controls

Discretionary Management Costs

The total annual management charge is 1.60% per

annum. There are no set-up charges or initial fees;

however, an early redemption charge may be applicable

(up to a maximum of 3.5% of the total contribution)

depending on the length of time the account has been

held and the total contributions and withdrawals from it.

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Understanding Financial Markets

Investment management is perhaps the most

misunderstood and at times mis-represented of all the

financial services.

So let‟s be clear from the outset, investment is all about

managing risk and the most common mistake that an

investor makes when choosing an investment or strategy

is to focus solely on returns.

Fear & Greed

Financial markets are driven primarily by emotions that

oscillate between fear and greed as opportunity is met by

uncertainty.

An investor that cannot look objectively at a portfolio and

make difficult and timely decisions based purely on

reasoned analysis and not emotion, is liable to get

sucked in at the top and thrown out at the bottom. That is

the nature of markets.

Objective Perspective

The power of emotions to influence investment decisions

should not be underestimated and the closer you are to a

portfolio, the greater the emotional influence. That is why

so few people are successful managing their own

portfolios.

Even highly experienced professionals can come unstuck

if decisions are not made within the supporting

framework of a rigorous investment process.

Full details of the Managed Accounts investment process

are available on request.

Risk/Return Balance

The short term unpredictability of markets is inescapable

and successful investment managers must work with,

and not second guess, that volatility to maximise returns.

Every investment can be described in terms of its

expected opportunity and its potential risk. That risk/

return balance is changing continuously and the

investment manager must objectively evaluate when the

risk is worth taking and when it is not.

Exploiting Volatility

In practical terms, consider what happens to this risk/

return balance when the value of an investment falls. All

other things being equal, the expected opportunity

increases, while the potential risk falls. The reverse is

also true and as markets rise, opportunities reduce and

risks increase.

This is clearly a simplification; however, it is easy to see

how this approach actually draws the manager in toward

the lows and encourages him out nearer the highs.

Continual Reassessment

In reality, of course, „all other things‟ are not always

equal and the investment manager must constantly

qualify and justify his or her assumptions to remain

objective.

Investment Objectives

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Selecting An Investment Strategy

Finding the right investment strategy is not an easy task.

There are many considerations including financial

planning, tax efficiency and suitability that must be

assessed simultaneously.

Define Your Objectives

The first step in identifying an appropriate strategy is to

define your own objectives. What is the purpose of the

portfolio; what do you want it to achieve; how much risk

are you prepared to accept; and are there any specific

requirements?

Your MAC Financial Adviser is best placed to help you

understand and formalise your investment objectives and

you should aim to review these at least once every year.

Performance Objective

The principal objective of most investors is to achieve an

absolute return on their capital. However, all investments

involve risk. Even cash is at risk from inflation and

exchange rate fluctuations.

Indeed, it is impossible to assess the value of a return

without knowing its associated risk. The Managed

Accounts ultimate aim is to achieve a high absolute

return for as little risk as possible - that is how Capital

International assess their performance.

Starting from this perspective, it is clearly absurd to make

investment decisions based on a relative assessment of

market indices or benchmarks.

Only two factors are important -

What is the expected return and for what risk?

By careful selection Capital International Limited can

actively review these objectives.

Investment Horizon

The investment horizon sets the perspective within which

investment decisions are made and is important because

market risk is largely a function of timescale.

Equities, for example, when considered over short time

periods can be extremely volatile. However, if the same

market is viewed over 5, 10 or even 20 years, the picture

is very different – short term volatility becomes almost

irrelevant. The Managed Account strategies reflect three

different investment horizons.

Cautious has a 1-2 year investment horizon, focusing on

reliable asset classes and accepting lower returns, as a

result.

Balanced has a 1 to 3 year investment horizon, allowing

greater freedom to achieve higher returns.

Growth has a 1 to 5 year investment horizon, enabling

the strategy to accept greater short term risk to enhance

returns.

The investment horizon does not reflect the Managed

Accounts suggested investment term. Like most

investment strategies, the Managed Accounts should be

considered over a minimum five year initial investment

period.

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Investment Objective

The Managed Accounts investment objective is to

achieve absolute returns within defined risk parameters

and investment horizons.

Investment Approach

In pursuit of absolute returns the Managed Accounts

invest in a broad range of asset classes designed to

maximise its ability to deliver returns, whilst minimising

the associated risk.

Managed Accounts strategies are constructed around a

managed portfolio of collective investment vehicles,

delivering a unique combination of diversification,

flexibility and efficiency.

Each Managed Account strategy delivers a highly

diversified investment exposure and is designed as a

complete investment solution and core strategy.

Currency Options

Managed Account strategies are available in Sterling.

Minimum Investment

The Managed Accounts offer investors their own

bespoke portfolio and is available for portfolios with a

minimum initial size of £75,000. In addition, subsequent

lump-sum top-ups can be made with a minimum of

£5,000, along with regular minimum monthly

contributions of no less than £500.

Cleared funds must be in your portfolio and available to invest prior to the 25th of each month, known as the „cut-off date‟.

Strategy Switching

Investors may elect to switch between the Managed

Account strategies at any time without penalty on the

proviso that the instruction to switch is received

before the 25th of the month in which the strategy is

to be switched.

SIPP Balanced Managed Account

The Balanced Managed Account portfolio is our flagship

strategy. It is designed to deliver the optimal balance

between return and risk, offering:

10% Target Annual Return

8-12% Volatility Target

Fixed Interest

28%

Alternative Strategies

25%

Equity 45%

Cash 2%

The Balanced Managed Account portfolio is designed for

investors who are prepared to accept a moderate level of

risk to achieve higher potential returns. The strategy

balances a strategic exposure to equities and other

higher risk investments, with a spread of lower risk

investment asset classes.

Balanced targets a strategic currency exposure of 80% in

the portfolio base currency, to minimise foreign exchange

volatility.

Balanced is actively managed and employs a 30% swing

factor around its strategic exposure targets.

Investment Strategies

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SIPP Cautious Managed Account

The Cautious Managed Account portfolio is a lower risk

strategy designed specifically for clients who require

lower volatility, offering:

SIPP Growth Managed Account

The Growth Managed Account portfolio is a more

aggressive strategy, targeting higher returns, but with a

higher level of risk. The strategy offers:

8% Target Annual Return

6-10% Volatility Target

13% Target Annual Return

10-14% Volatility Target

Fixed Interest

40%

Alternative Strategies

33%

Equity 25%

Cash 2%

Fixed Interest

10%

Alternative Strategies

23%

Equity 65%

Cash 2%

The Cautious Managed Account portfolio focuses on

more reliable asset classes in order to achieve its risk/

return targets.

Investment exposure is dominated by lower risk asset

classes such as fixed interest, arbitrage strategies and

commercial property, although the strategy includes

some exposure to equities and other higher risk

investments.

Cautious targets a strategic currency exposure of 89% in

the base currency, and employs a 30% swing factor to

maximise returns.

The Growth Managed Account portfolio is for investors

who are prepared to accept a higher level of risk in

pursuit of higher returns. The strategy has significant

exposure to equities and other higher risk investments,

but retains some exposure to lower risk assets to improve

diversification and control volatility.

Growth targets a strategic currency exposure of 71% in

the base currency, and utilises a wider swing factor of

50%, giving greater flexibility to deliver returns.

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Diversification

Spreading risk by simply „not putting all your eggs in one basket‟ is clearly wise; however, effective diversification is much

more powerful than that.

Analysing how individual investments interact to form a portfolio yields some astounding revelations. Remarkably by

mixing independent, or „non-correlated‟ assets, it is possible to actually eliminate certain risks without compromising

returns.

Broad Asset Class Diversification

The power of diversification is really only limited by the

diversity of assets that are available for investment.

Investors are fortunate today to have a wide range of

alternative asset classes that are now economic and

practical to invest in, to complement the more traditional

asset classes.

The result is to shift the efficient frontier further out and

improve the risk-return trade-off that is achievable. The

MAC Financial SIPP Managed Accounts embrace this

added diversity, harnessing its power to enhance

performance.

Efficient Portfolio Optimisation

Once you have identified an appropriate risk/return

objective, it is then possible to statistically calculate the

optimal investment allocations that should achieve those

objectives over the long term. We term this process

efficient portfolio optimisation.

Diversification

Market Hedge

The Efficient Frontier

Average Volatility

Average Return

9.5%

7.5%

7% 12%

Bonds

Inflation Linked

Cash

Property High Yield

Equity

Arbitrage Hedge

Leveraged Hedge

Private Equity

The Efficient Frontier

You can, of course, mix assets to create a near infinite

number of portfolio combinations and each will have a

unique risk/return balance. However, the range of

possible portfolios is defined by the Efficient Frontier.

Everything below the frontier represents a possible

portfolio combination, while the area above it is

impossible to achieve.

What does this mean in practice? Well, why invest solely

in equities when portfolio A can achieve the same return

for less risk, and/or portfolio B can achieve a higher

return for the same risk?

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Property

Commodity/Specialist

Arbitrage Hedge

Market Hedge

Pacific Basin

Emerging Markets

Continental Europe

Japan

North America

United Kingdom

High Yield

Investment Grade

Efficient Strategic Allocations

The Managed Account strategies have been engineered

by our investment management partner, Capital

International, through the process of efficient portfolio

optimisation to achieve their respective target returns, for

the lowest possible risk. The efficient strategic allocations

are detail below:

Tactical Allocations

The Managed Accounts are a „dynamic strategy‟ and

while the allocations detailed above highlight the long-

term strategic targets, day-to-day tactical allocations may

vary significantly from these levels in accordance with the

Swing Factor employed.

Cautious and Balanced utilise a swing factor of 30%

either side of the strategic allocations, while Growth has

a higher swing factor of 50%.

* The equity regional breakdown is illustrated for sterling

based portfolios reflecting a bias toward UK equities.

Balanced MA

Cautious MA

5.0%

Growth MA

Fixed Interest 10.0% 28.0% 40.0%

Equity * 25% 45%

35.0% 23.0% 5.0%

5.0% 5.0%

5.0% 9.0% 13.0%

2.5% 4.5% 6.5%

1.5% 3.0% 4.25%

1.25% 2.25% 3.25%

0.75% 1.25% 2.0%

100% 100%

10.0% 15.0% 5.0%

8.0% 5.0%

5.0% 5.0%

5.0%

8.0%

5.0% 5.0% 5.0%

100%

Alternative Strategies 33.0% 23.0% 25.0%

Cash 2% 2% 2%

14.0% 25.0% 36.0%

65%

Asset Allocation

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Investment Opportunities

There are many asset classes that are available for investment and each offers a different risk/return characteristic. The

balance is continuously changing; however, typical return probabilities are illustrated below.

The confidence bands illustrate the probability of a 12 month return falling within the extremities of each band. The

expected average return is the centre point highlighted in dark blue & plotted in ascending order.

Volatility Of Returns Note the spread of possible returns for each asset class

either side of the average. Equities, for example, have

the potential to achieve over 35% in a year, but there is a

equal chance that equities may lose up to 17%. On

average, we expect equities to achieve a healthy 9%;

however, such a high level of volatility is unpalatable for

many investors.

Perhaps more surprisingly, when we look at fixed

interest, which is generally regarded as low risk, the

statistics suggest returns are likely to be between 17%

and minus 6% in any one year. With an average

expected return of just 5.5%, this asset class seems

equally unattractive when viewed in isolation.

Managed Account Target Return Profile The target return profiles for the three Managed Account

strategies are also illustrated above. Through effective

asset class diversification the MAC Financial SIPP

Managed Account strategies are able to target excellent

average returns, with substantially reduced risk. This is

illustrated by the tightening of the confidence bands for

each Managed Account strategy.

Investment Opportunities

90% 70% 50% 30%

Confidence Levels

0%

10%

20%

30%

40%

Fixed Interest

Arbitrage Hedge

High Yield

Commercial Property

Commodity Global Equity

Market Hedge

SIPP

Balanced SIPP

Growth SIPP

Cautious

-10%

-20%

Cash

Retu

rn

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Client Service

Your MAC Financial Adviser should be your principal

point of contact should you wish to discuss the generic

nature of your Managed Account portfolio. We work

closely with our investment management partner, Capital

International Limited, to ensure we are kept fully informed

of strategy, performance and portfolios.

Portfolio Manager

Every Capital International Managed Account portfolio

has a dedicated portfolio manager, and clients may

contact their portfolio manager at any time, either by

telephone or in person, during normal working hours.

For more information on this service please contact your

MAC Financial Adviser.

Reporting

MAC Financial SIPP Managed Account clients receive

contract notes on all transactions and the following

quarterly reporting:

Managed Account Charges

The MAC Financial SIPP uses a transparent charging

structure designed to minimise costs, but without

compromising quality or service. Internal dealing fees are

charged at a nominal rate to ensure performance is not

degraded. The total annual charge is 1.6% of the portfolio

value, deducted quarterly in arrears. There are no setup

charges or initial fees.

Redemption Structure

The Managed Accounts recommended initial investment

term is a minimum of five years. An early redemption

charge may be applicable on redemptions independent

on the length of time the portfolio has been held and the

total contributions and withdrawals from it.

An instruction to partially or fully redeem must be

received to the 25th of each month, known as the „cut-off

date‟.

The maximum redemption charge is 3.5% of the total

contributions, which diminishes quarterly, at a rate of

0.6% of the quarterly portfolio value per annum.

We reserve the right to vary the term over which the

redemption charge is taken if benefits are withdrawn.

( e.g. tax free lump sum )

Further information

Further information regarding the MAC Financial SIPP

Managed Accounts can be found within our Terms of

Business, including the option to hold other funds.

If you wish to discuss any aspect of the Managed

Accounts please do not hesitate to contact us:

Telephone: +44 (0) 1624 639450

Facsimile: +44 (0) 1624 639459

E-mail: [email protected]

Account Opening

To open an account please complete the SIPP account

opening form and send it, together with the appropriate

‘Know-Your-Customer‟ information to:

SIPP Managed Accounts

MAC Financial Limited

MAC House

64a / 65 Hope Street

Douglas

Isle of Man

IM1 1JE

Valuation & Statements

Performance Report

Detailed Portfolio Review

Market Review & Outlook

Client Services

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About MAC Financial Limited

MAC Financial, through various acquisitions, has over

twenty-five years experience in the Isle of Man, providing

Employee Benefits advice to large multi-national and

small corporate clients. As a Corporate IFA (Independent

Financial Adviser) for investment business, licensed by

the Isle of Man Financial Supervision Commission to

carry on Investment Business, we can access and advise

on a full range of financial planning services.

MAC Financial Limited acquired Aon Financial Services

in January 2004. MAC Financial also acquired Marsh‟s

Financial Services book of business in the Isle of Man in

October 2005. Then in September 2006 MAC Financial

acquired the investment division of Anglo Irish Bank.

While the generic advice in this brochure is approved by

MAC Financial Limited, no specific fund

recommendations are made. The overall SIPP is

administered by MAC Financial Pension Trustees which

is registered with the Insurance & Pensions Authority as

a professional retirement benefits scheme administrator.

MAC Financial design, advise and implement Employee

Benefits Programmes for employers on the Isle of Man.

Our core expertise includes:

Group Pension (Occupational & Personal Pension)

Group Death in Service

Group Long Term Disability (Income Protection)

Group Additional Voluntary Contributions (AVC)

Group Private Medical Insurance

Small Self Administered Pensions to directors

Self Invested Personal Pensions to Professionals and

Senior Employees

Shareholder Protection

Partnership Protection

In addition we also offer independent financial advice to

the employees and pensioners of our corporate clients.

MAC Financial also works closely with accountants and

solicitors to provide a complementary service to their

clients.

Our main areas of activity for Private Clients are:

Personal Pension advice

Pre-retirement and redundancy planning

Investment planning

Life Assurance (including sickness and healthcare)

Advice to accountants, solicitors and their clients.

Investment Management Partner

We have chosen Capital

International Limited to

deliver a fully discretionary

portfolio service. They are a broad scope investment

business based offshore in the Isle of Man. Established in

1996 on the foundations of integrity, innovation and

excellence, they provide services to a wide range of

institutions and private individuals worldwide, including the

Isle of Man Government.

Capital International exists to create long-term and valued

relationships with clients and business partners built on

trust and the delivery of effective and innovative

investment solutions that meet their needs. They are

proud to count amongst their clients many internationally

respected financial institutions.

Capital International is licensed by the Isle of Man

Financial Supervision Commission and a Member of The

London Stock Exchange and an Isle of Man Champion.

Background

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What are the SIPP Managed Accounts?

The SIPP Managed Accounts are a portfolio of collective investments, managed on your behalf by our investment management partner, Capital International Limited, and their discretionary management team. The SIPP Managed Accounts provide you with a range of investment objectives.

How do the Managed Accounts work?

Once you have selected your choice of Managed Account strategies, Capital International Limited will manage the portfolio on your behalf in accordance with the stated investment objectives.

What are Collective Investments?

Collective or „Pooled‟ Investments include unit trusts, open ended investment companies, investment trusts, exchange traded funds and mutual/offshore funds.

How do collective investments work?

When you buy into a collective investment you are effectively pooling your money with other investors, in exchange for units/shares in the fund. Your money is passed over to a professional fund manager, who invests your money in accordance with the fund‟s investment objectives.

What are the benefits of investing in collective investments

as opposed to buying shares in single companies?

Collectives provide a very efficient means of accessing a wider range of investments. For example, most equity funds hold between 30 and 100 individual shares. The cost of building and maintaining such a portfolio yourself can be very expensive. Risk is spread across a wide range of holdings and each fund is professionally managed. Collectives also provide access to world markets which can be difficult to access and monitor directly.

Why choose MAC Financial Limited?

MAC Financial has over twenty-five years experience in the Isle of Man, providing Employee Benefits advice to large multi-national and small corporate clients. As a Corporate IFA (Independent Financial Adviser) for investment business, regulated by the Financial Supervision Commission, we can access and advise on a full range of financial planning services.

Who regulates MAC Financial Limited?

We are licensed to conduct investment business by the Isle of Man Government Financial Supervision Commission. The provider of the SIPP itself is MAC Financial Pension Trustees Limited which is registered with the Insurance & Pension Authority as a Professional Retirement Benefits Scheme Administrator.

Do the Managed Accounts carry risks?

All investments carry an element of risk. The level of risk is determined by your choice of SIPP strategy and it is important that you seek appropriate advice from your investment adviser before selecting a strategy.

How much will the Managed Accounts cost?

The annual charge for SIPP Managed Accounts is 1.60%, based on the value of the portfolio at each valuation date. There are no setup or initial charges.

Value Added Tax (VAT)

VAT is currently applicable on a quarter of the total annual charge. VAT will be charged at prevailing rate if applicable.

Are there any transaction or bank charges?

A transaction/commission fee of 0.25% will be applied to each transaction; however, all discounts negotiated with the fund managers are credited to the portfolio in full. Normal bank charges will apply where appropriate.

Are there any redemption charges?

The amount of the redemption charge (if any) is dependent upon the length of time the portfolio is held. The maximum charge is 3.5% of the total contributions made, but this percentage reduces quarterly, at a rate of up to 0.6% of the quarterly portfolio value per annum.

What is the settlement period for redemptions?

An instruction to partially or fully redeem must be received prior to the 25th of each month (the „cut-off date‟).

What is the minimum/maximum investment?

The minimum investment into the MAC Financial SIPP Managed Accounts is £75,000.

There is no maximum investment.

Is it possible to make subsequent contributions into my

MAC Financial SIPP Managed Account portfolio?

Yes. The minimum subsequent lump-sum investment is £5,000 with regular monthly contributions being no less than £500.

When will my contributions be invested?

Cleared funds must be in your account and available to invest prior to the 25th day of each month being the „cut-off date‟.

Will I have access to my investment manager?

Yes, you can access your investment manager at any time, to discuss any aspects of your MAC Financial SIPP Managed Account portfolio.

Can I make a withdrawal or capital repayment?

Yes, you may withdraw funds from your portfolio at any time, subject giving notice prior to the 25th „cut-off date‟ and the rules governing your pension either on a one-off or on a regular basis, by simply sending appropriate instructions to us in writing. A redemption charge may apply.

How do I monitor performance?

Every three months we will send you a portfolio valuation and investment report, along with details of any changes that took place during the review period. Your manager will be available to discuss any performance issues.

Frequently Asked Questions

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Can I switch between the Managed Account Strategies?

Yes, provided you instruct us in writing we will arrange a switch for you. We do not recommend frequent switching between the MAC Financial SIPP Managed Account strategies.

How do I invest in the MAC Financial SIPP Managed

Accounts?

Investing in the MAC Financial SIPP Managed Accounts is easy. The Managed Accounts are available via the SIPP product. Simply complete the SIPP application form and return it to us. If you require further information, please contact us on +44 (0) 1624 639450. Once your account is opened we will arrange with you the transfer of the necessary funds in order to activate your SIPP.

How do I redeem my SIPP Managed Account Portfolio?

If you decide to encash your SIPP Managed Account portfolio, simply instruct us in writing prior to the 25th of each month. We will liquidate your holdings and forward the proceeds to a suitable alternative and permitted pension arrangement.

What is a Discretionary Managed Portfolio?

An investment portfolio where the investment manager has discretion or sole responsibility to make investment decisions on your behalf, in accordance with the stated investment strategy as agreed with you in writing.

What is an Investment Manager?

The qualified person responsible for managing your investment portfolio.

What are Unit Trusts?

A trust formed to manage securities on behalf of a large number of investors. Unit Trusts are governed by Trust Law: the trust deed sets out the investment objectives of the trust and the Trustees are responsible for ensuring the fund is managed in accordance with the stated objectives.

What are Equities?

Equities represent proportionate ownership of a company. Individual equities can be risky, but collectively they have proved to be one of the best performing asset classes over the long-term and an excellent hedge against inflation.

What are Investment Grade Bonds?

Investment grade bonds or fixed interest securities are high quality debt instruments providing a fixed return to a known maturity date. Bonds offer lower risk returns and tend to move in an opposite direction to equities, making them an excellent diversifier within a portfolio.

What are High Yield Bonds?

High yield bonds are debt instruments issued by entities with a credit rating below investment grade. They offer higher returns but involve greater risk. High yield bonds display some characteristics of both equities and bonds. This makes them particularly useful at certain stages of the economic cycle.

What about Property?

Residential property can be volatile, reacting sharply to changes in growth, inflation and interest rates. By contrast commercial property offers stable long-term yields, while capital values have tended to keep pace with inflation.

What is Arbitrage Hedge?

Arbitrage strategies seek to exploit mis-pricing and market inefficiencies to deliver a low risk investment return, with little or no correlation to financial markets making arbitrage strategies an excellent portfolio diversifier.

What is Market Hedge?

We define market hedge funds to include long-short equity strategies, FX and global macro strategies. Market strategies tend to target aggressive returns and accept relatively high levels of risk. Returns tend to be un-correlated with traditional assets, making hedge strategies an excellent diversifier.

What are Commodities?

Commodities are real assets including energy, precious metals and natural resources. Commodity values are determined principally by supply and demand and can prove a safe haven during difficult times.

What are OEICs?

Open Ended Investment Companies (OEICs) are similar to unit trusts in so far as they are pooled investments. They differ in structural terms as they are companies and not trusts. The Authorised Corporate Director is responsible for ensuring the fund is managed in accordance with the stated objectives.

What are Investment Trusts?

Another type of collective investment but unlike unit trusts and OEICS, investment trusts are closed end quoted companies whose shares are listed on the stock exchange and trade in the same way as any other listed security.

What are ETFs?

Exchange Traded Funds (ETFs) are quoted shares which provide investors with access to a particular index (e.g. the FTSE 100) or sector.

What are Offshore Funds?

Are similar to unit trusts and OEICs but based or „domiciled‟ outside the United Kingdom to obtain a tax advantage. Some funds allow the manager greater investment flexibility.

What is Exchange Rate Risk?

The risk that the value of the investment may be reduced by movements in the exchange rate on a foreign currency. For example, a „Sterling’ investor investing in any fund denominated in a currency other than sterling would face exchange rate risk in addition to the investment risk.

Frequently Asked Questions

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Contact Details

MAC Financial Pension Trustees Limited

MAC House

64a / 65 Athol Street

Douglas

Isle of Man

IM1 1JE

T: +44 (0) 1624 639450

F: +44 (0) 1624 639459

E: [email protected]

MAC Financial Limited is licensed by the Isle of Man.

MAC Financial Pension Trustees Limited is registered with the Insurance & Pension Authority.

MA

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IPP

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