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Glossary

ABI Sector

According to the Association of British Insurers, ABI Sectors exist to enable investors and advisers to compare unit-linked life and pension funds.

You can read the ABI's official sector methodology document on their Web site. For our purposes, we've provided a brief outline of each ABI Sector below.

Asia Pacific including Japan Equities Funds which invest at least 80% of their assets in Asia Pacific equities and which include Japanese equities.

Asia Pacific excluding Japan Equities Funds which invest at least 80% of their assets in Asia Pacific equities, but which normally hold no equities quoted on the Japanese stock market.

Balanced Managed Maximum of 85% total equity (including Preference Shares, Permanent Interest Bearing Shares and Convertibles). Minimum of 50% Sterling based assets (including fixed interest hedged back to Sterling).

Cautious Managed Maximum of 60% total equity (including Preference Shares, Permanent Interest Bearing Shares and Convertibles). Minimum of 60% Sterling based assets (including fixed interest hedged back to Sterling).

Commodity/Energy Funds that invest at least 80% of their assets in commodity and/or energy related securities.

Defensive Managed Maximum of 35% total equity (including Preference Shares, Permanent Interest Bearing Shares and Convertibles). Minimum of 85% Sterling based assets (including fixed interest hedged back to Sterling).

Distribution Net of tax yield on the underlying portfolio of at least 110% of the FTSE All Share yield. Maximum of 60% total equity (including Preference Shares, Permanent Interest Bearing Shares and Convertibles). Minimum of 50% Sterling based assets (including fixed interest hedged back to Sterling).

Europe excluding UK Equities Funds which invest at least 80% of their assets in equities quoted on European stock markets, but which normally hold no equities quoted on the UK stock market.

Europe including UK Equities Funds which invest at least 80% of their assets in equities quoted on UK and European stock markets. Not to include funds which would otherwise qualify for a UK Equity sector.

Flexible Managed Maximum of 100% total equity (including Preference Shares, Permanent Interest Bearing Shares and Convertibles).Minimum of 20% Sterling based assets (including fixed interest hedged back to Sterling).

Global Emerging Markets Funds which invest at least 80% of their assets in equities from emerging markets, as defined by the FTSE World Index Indices, without geographical restriction.

Global Equities Funds which invest at least 80% of their assets in equities. Funds must be invested in more than one equity region.

Global Fixed Interest At least 80% of investments to be held in non-UK based assets. All other criteria identical to UK Fixed Interest criteria.

Global High Yield Funds which invest at least 80% of their assets in non-UK fixed interest securities. Funds which invest at least 50% of their assets in subinvestment grade fixed interest securities.

Global Property Funds that invest at least 80% of their assets in direct property and property securities. Minimum 50% non-UK assets.

Japan At least 80% of investments in Japanese equities.

Money Market Funds which invest at least 95% of their assets in sterling (or hedged back to sterling) money market instruments.

North America Funds which invest at least 80% of their assets in equities quoted on United States and Canadian stock markets.

Protected/Guaranteed Funds Funds, other than money market funds, which principally aim to provide a return of a set amount of capital back to the investor (either explicitly guaranteed or via an investment strategy highly likely to achieve this objective) plus some market upside. Funds that offer a guaranteed minimum return of original capital will be flagged.

Specialist Funds that have an investment universe that is not accommodated by the mainstream sectors. Performance ranking of funds within the sector as a whole is inappropriate, given the diverse nature of its constituents.

Sterling Corporate Bond Funds which invest at least 80% of their assets in sterlingdenominated (or hedged back to sterling) broad investment grade corporate bond securities.

Sterling Fixed Interest Funds which invest at least 80% of their assets in sterlingdenominated (or hedged back to sterling) broad investment grade fixed interest securities.

Sterling High Yield Funds which invest at least 80% of their assets in sterlingdenominated (or hedged back to sterling) fixed interest securities. Funds which invest at least 50% of their assets in sub investment grade fixed interest securities.

Sterling Long Bond Funds (used in conjunction with pension plans) with a specific objective for the movement in the value of units in the fund to approximate to movements in annuity purchase prices. Funds which invest at least 80% of their assets in sterlingdenominated (or hedged back to sterling) long duration (10 years or more) broad investment grade fixed interest securities.

Sterling Other Fixed Interest Funds with investment policy permitting significant changes in asset allocation between broad investment grade and subinvestment grade securities. Funds which invest at least 80% of their assets in sterling-denominated (or hedged back to sterling) fixed interest securities.

Sterling Preference Shares & Convertibles Funds which invest at least 80% of their assets in sterlingdenominated (or hedged back to sterling) Preference Shares, Permanent Interest Bearing Shares and Convertibles.

UK All Companies Funds which invest at least 80% of their assets in equities quoted on the UK stock market with the primary objective of achieving capital growth or total return.

UK Direct Property Funds that normally invest at least 80% of their assets in UK property. Managers may occasionally use Property Index Certificates or other property instruments for up to 20% property investment.

UK Equity Income Funds which invest at least 80% of their assets in equities quoted on the UK stock market where the net of tax yield on the underlying portfolio of at least 110% of the FTSE All Share yield.

UK Gilt At least 80% in UK Gilts.

UK Index-linked Gilts At least 80% in UK Index-linked Gilts.

UK Property Securities Funds that invest at least 80% of their assets in property securities quoted on the UK stock market and direct property located in the UK.

UK Smaller Companies Funds which invest at least 80% of their assets in equities quoted on the UK stock market which form the bottom 10% by market capitalisation.

Unclassified Any funds that do not meet any existing sector criteria, or exceptionally do not provide sufficient data for the Investment Classification Group to monitor its classification effectively.