Scottish Equitable plc, Scottish Equitable House, Edinburgh Park, Edinburgh EH12 9SE
Telephone: 08456 10 00 10 Fax: 0131-549 4225 Website: www.scottishequitable.co.uk
[PLANHOLDER NAME]
[PLANHOLDER ADDRESS 1]
[PLANHOLDER ADDRESS 2]
[PLANHOLDER ADDRESS 3]
[PLANHOLDER ADDRESS 4]
[POSTCODE]
Helpdesk: 08456 10 00 01
Ref: {PLAN NUMBER}
March 2003
Dear [SALUTATION]
Scottish Equitable European Smaller Companies Pension Fund
I am writing to tell you about some important changes to the Scottish Equitable Pension fund range which will
affect your plan.
Our sister company, AEGON Asset Management, which manages all of Scottish Equitable’s in-house funds, is
withdrawing from running money in certain niche areas of the market. This move will allow AEGON Asset
Management to concentrate on its core range of funds.
This has provided Scottish Equitable with an opportunity to seek out replacement fund managers, with
recognised skills, proven expertise and a robust research capability in the areas affected. And so, I am pleased
to announce that we have appointed Lazard, Morley and UBS as the new managers of our European Smaller
Companies, Socially Responsible Equity and Emerging Markets Pension Funds respectively. (Which of these
funds you are invested in is (are) listed at the top of this letter.)
Further details of these (and other) fund changes are set out in the Investment range changes matrix which
accompanies this letter. This matrix tells you the additional charge that will be applied to have the funds
managed externally. This charge will be included within the daily unit price of the fund.
For the fund(s) you are invested in, I have also enclosed a comprehensive factsheet, giving further information
on the new fund management house and the fund.
You do not have to take any action. However, if you would like advice on whether your fund choice is still best
placed to satisfy your personal investment criteria, please contact your usual financial adviser. If you do not
currently have a financial adviser, you can get information about advisers in your area who can give you
independent advice from IFA Promotions, by ringing 0800 0853250 or by going to its website at
www.ifap.org.uk.
Scottish Equitable is not allowed to give you any investment advice. However, if you have any other questions
about your plan, please do not hesitate to contact our Helpdesk on 08456 10 00 10.
Yours sincerely
Maurice Brunet
Operations Director
Scottish Equitable plc, Registered Office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517).
Regulated by the Financial Services Authority. A member of the AEGON UK Marketing Group.
The Scottish Equitable European Smaller Companies Fund
This fund invests in smaller companies whose shares are listed on European
stock exchanges. Smaller companies are defined as the smallest 10% of European
listed companies, measured by market capitalisation. The portfolio will be
diversified across all major European markets. This is a specialist fund which
aims to achieve capital growth over the longer term, subject to short-term
volatility. The fund is managed on behalf of Scottish Equitable by Lazard Asset
Management, one of our investment partners.
Lazard Asset Management
Lazard is a private global investment
bank, present in 15 countries with
2,750 employees and 140 partners.
Lazard Asset Management is the
global investment management
company within the Lazard group.
The firm has a truly international
perspective, with a strong tradition of
investing prudently wherever it finds
opportunity. Dating back to the
nineteenth century, it has built a global
reputation for outstanding investment
management expertise. Its total funds
under management exceed £34.7 billion
as at 31 December 2002, managed by
over 100 investment professionals.
The Lazard culture is conservative,
professional, client oriented and team
driven. Lazard Asset Management has
both the financial strength and
investment skills to compete in today’s
global investment arena. It is a private
and independent partnership, highly
motivated to perform well for its
clients, and it has a strong commitment
to service.
Investment philosophy and fund
details
The key to the success of the European
Smaller Companies Fund is Lazard’s
ability to identify attractive stocks and
build portfolios.
Stocks are identified by highly
disciplined selection criteria which look
for companies that are financially
productive yet inexpensively priced.
Emphasis is on selecting stocks rather
than sectors or markets. This is done
company by company – Lazard does
not invest in markets, only individual
securities. It is not Lazard’s investment
philosophy to allow market trends or
fashion to compromise its golden rule –
never overpay!
Using the power of global research
resources that are organised by
industry rather than by country,
freeing up the vision and insight of
dedicated professional investment
specialists, and providing an
environment where teamwork
flourishes – all of this leads to
identifying investment opportunities
not available to more conventional
fund managers.
Stock selections are subjected to a
stringent screening process that weeds
out all but the the dynamic performers.
These ‘short-listed’ companies are then
further analysed using a valuation
system that was developed in-house.
The research process is neither static
nor sequential, but continuous.
Continued overleaf
Relative risk
The fund is rated as above average risk within the context of Scottish Equitable’s overall
fund range.
Fund value
at 31 December 2002
£37.3m
Typical asset allocation
Charges
Fund rating
Commercial services
Financials
Consumer discretionary
Process
Consumer durables
Producer manufacturing
Consumer staples
Information technology
Energy
Cash
An annual fee of 0.45% above the standard product charge will apply for this fund.
Full details on the charging structure for the fund and Scottish Equitable’s products are
available from your Independent Financial Adviser. Scottish Equitable and Lazard reserve
the right to vary these charges in the future.
The underlying Lazard fund has a Forsyth-OBSR AA rating.
This is an indication of highly superior quality based on
process and track record.
Benefits are not guaranteed and the value of investments can go down as well as up.
GD/1707
Scottish Equitable plc, Registered Office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517).
Regulated by the Financial Services Authority. A member of the AEGON UK Marketing Group.
INV/03496/03/03
Investment range changes
Summary matrix
Pension funds
Fund name
Change taking place
When
Additional
annual charge
Scottish Equitable
European Smaller
Companies Fund
Fund management house changing
to Lazard Asset Management
By beginning of
May 2003
0.45% *
Fund being withdrawn from stakeholder product
25 April 2003
Fund management house changing
to Morley Fund Management
By beginning of
May 2003
Fund being withdrawn from stakeholder product
25 April 2003
Fund management house changing
to UBS Global Asset Management
By beginning of
May 2003
0.45% *
Scottish Equitable
Socially Responsible
Equity Fund
Scottish Equitable
Emerging Markets
Fund
0.55% *
(Fund not available under stakeholder)
Scottish Equitable
Latin American Fund
Fund being wound-up
30 June 2003
N/A
Scottish Equitable
Building Society Fund
Fund being wound-up
30 June 2003
N/A
Fund name
Change taking place
When
Additional
annual charge
Scottish Equitable
Ethical Care
Cautious Fund
Fund changing to adopt negative
screening criteria
By beginning of
May 2003
None
Fund name changing to Ethical Cautious
Life Fund
By beginning of
May 2003
Fund management house changing
to Morley Fund Management
By beginning of
May 2003
Fund name changing to Socially Responsible
Equity Life Fund
By beginning of
May 2003
Life funds
Scottish Equitable
Ethical Care Equity Fund
0.55% *
*The additional annual charge represents the charge that will apply to have the fund managed externally. This charge will be
included within the daily unit price of the fund.
Benefits are not guaranteed. The value of investments may go down as well as up. Past performance is not necessarily a guide to future
performance.
GD/1882
Scottish Equitable plc, Registered Office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517).
Regulated by the Financial Services Authority. A member of the AEGON UK Marketing Group.
INV/03520/03/03