Halifax fund update

Changes in detail

The changes are planned to take place on the date given, but some of these changes may happen later.

How the fund will invest

The fund will invest in the UK Large Company Tracker. The fund won’t invest in companies:

• where 5% or more of their revenue is obtained from thermal coal or tar sands operations
• where 10% or more of their revenue is obtained from tobacco production, sales or related services
• which manufacture controversial weapons prohibited by international conventions such as anti-personnel landmines, cluster munitions, chemical and biological weapons
• which don’t meet one or more of the ten United Nations Global Compact principles. Those cover, but are not limited to, human rights, anti-corruption and the environment. Find out more at www.unglobalcompact.org/what-is-gc/mission/principles

Current fund name	Fund name from 28th March 2022
UK FTSE 100 Index Tracking Fund	UK Large Company Tracker Fund

About the fund’s Benchmark Index

The benchmark index that the fund will track will be an amended version of the FTSE 100 Index. The types of company detailed above will be excluded from the fund so that it invests more responsibly. The exclusions from the benchmark index will be made by FTSE. A fund’s benchmark is an index, rate or equivalent measure used to assess the performance of the fund. Usually a market index or the average performance of similar investments, or a bank index rate are used as benchmarks.

The fund is a passive investment fund. This means that the Investment Adviser aims to track the fund’s index. The Investment Adviser does this by investing in all or some of the assets in the fund’s index to give a return that aims to reflect how the index is performing. The change Halifax are making means that they are replacing the benchmark index, excluding certain companies from the fund.

Current Benchmark Index	Benchmark Index from 28th March 2022
FTSE 100 Index	FTSE 100 Custom Screened Index

Change of the fund's investment objective and policy

Current fund objective	Fund objective from 28th March 2022
The investment objective of the UK FTSE 100 Index Tracking Fund is to aim to match as closely as possible, before deduction of fees, the performance of the FTSE 100 Index (the “Index”).	The investment objective of the UK Large Company Tracker Fund is to aim to match as closely as possible, before deduction of fees, the performance of the FTSE 100 Custom Screened Index (the “Benchmark Index”).

Current fund policy

Fund policy from 28th March 2022

The fund aims to invest in shares of all of the companies within the Index. This is often referred to as a ‘full replication’ approach.
The fund may also invest in collective investment schemes to gain exposure to the Index.
Derivatives and stock lending may be used for the purpose of managing the fund in a way that is designed to reduce risk or cost and/or generate extra income or growth (often referred to as efficient portfolio management).
The FTSE 100 Index provides a representation of the returns of securities in the UK equity market.

The fund aims to invest in shares of all of the companies within the Benchmark Index. This is often referred to as a ‘full replication’ approach.
The fund may also invest, up to 10%, in collective investment schemes to gain exposure to the Benchmark Index.
Derivatives and stock lending may be used for the purpose of managing the fund in a way that is designed to reduce risk or cost and/or generate extra income or growth (often referred to as efficient portfolio management).
The Benchmark Index has been selected as an appropriate benchmark as it measures the performance of a sub-set of equity securities within the FTSE 100 Index (the “Parent Index”). The Parent Index provides a representation of the returns of securities in the UK equity market and the Benchmark Index excludes companies from the Parent Index based on the exclusions screening criteria.

Transaction costs

Transaction costs are incurred by our funds when investments are bought and sold. These can include broker fees and commissions charged for carrying out the trade, taxes incurred when buying and selling different types of investments. They are paid from the value of the fund and this is a normal part of the ongoing management for funds.

Buying and selling assets as a result of the fund changes

Halifax anticipate that approximately 7% of the current companies (also referred to as assets) within the UK Large Company Tracker fund will be excluded and substituted with increased holdings in existing companies held within the fund, to align the fund to the new benchmark index. The transaction costs for this activity will increase in the short-term and be borne by the fund itself and are estimated to be 0.04% of the overall value of the fund. To put this into context, it amounts to an approximate cost of £0.40 for every £1,000 of your investment.

What are my options?

If you are happy that the fund still meets your investment objectives, you don’t need to take any action and your investment will be linked to the UK Large Company Tracker Fund.

If not, you can switch to the Foresters Stakeholder (Schroders) Managed 1 Fund, contact our Customer Services team, alternatively you can transfer your funds to another provider.

Fund switch to Foresters

To switch to the Foresters Stakeholder (Schroders) Managed 1 Fund please send in a signed letter request to the following address: FREEPOST Foresters Financial, Forester Life CTF Team, 2 Cromwell Avenue, Bromley BR2 9BF This letter must include the Plan number, your child’s address, the current fund name (UK Large Company Tracker Fund) and the fund you wish to switch to (Foresters Stakeholder (Schroders) Managed 1 Fund). Also please confirm if you would like to switch the current funds and/or all future contributions as well. Making this fund switch will increase your Annual Management Charge to 1.5%.

Transfer out

If you would like to transfer your child’s CTF to another provider, please contact the new provider and they will be able to arrange the transfer.

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