fia fund summary

8/3/2019 FIA Fund Summary

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Helping you make the right choiceInvestment Fund Summary

for the Flexible Income Annuity

FlexibleInco

meAnnuity


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Questions&

Answers

WhatarethekeybenefitsoftheFlexibleIncom

eAnnuity

TheMGMAdvantageFlexible

IncomeAnnuity

Turningyourpensionsavings

intoanincomefo

rlife

Moreinform

ation

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With the MGM Advantage Flexible

Income Annuity, weve worked closely

with Old Broad Street Research to

give you access to funds managed by

world-class investment managers.

Old Broad Street Research (OBSR) is

a privately owned and completely

independent business and their

investment research is respected

across the industry. The OBSR Fund

Ratings Service is widely

acknowledged in the investment

world as an independent mark of

quality and excellence.

We asked OBSR to choose a simple

range of actively managed funds that

would cater for different attitudes to

risk and demonstrate strong

performance in their chosen sectors.

These are J.P. Morgan Asset

Management, Newton and Jupiter.

For the passive range, weve selected

Vanguard and OBSR have constructed

three risk-graded portfolios using

Vanguard funds to form the cautious,

balanced and adventurous passive

funds. To complete the range, MGM

Advantage has also chosen a Cash

Fund, provided by Insight Investment.

OBSR will monitor the active and

passive funds on an ongoing basis. If

they believe an existing fund is not

performing well against the fund

objectives, OBSR will recommend

appropriate action to correct this.

We have negotiated rebates against

the Annual Management Charges of

our actively managed funds and these

will be passed on to you by reducing

your annual policy charge.

Fund performance information will be

available on our website

mgmadvantage.com.

Our investment proposition

Introduction


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Choose a fund that fits

For the Flexible Income Annuity, we

have selected seven funds in total a

cautious, balanced and adventurous

fund with an actively managed and

passively managed version of each,

plus a Cash Fund.

For the active funds, OBSR has

chosen some of the best-known fund

managers in the world, all with

excellent track records in their fields.

For the passive range, weve selected

Vanguard. The Vanguard Group is a

leading provider of high value

investment services and manages over

US $1 trillion in assets worldwide.*

Vanguard launched in the UK in 2009

and, as part of the Vanguard Group,

draws on over 30 years of experience

and innovation.

MGM Advantage is one of the first UK

companies to offer Vanguards funds

as part of its investment portfolio.

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Choice of seven funds

*as at 30 June 2009.


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It will be up to you to choose an

investment strategy that you believe

meets your attitude to risk and will

deliver the investment growth you

want from your Flexible Income

Annuity.

A financial adviser will be able to help

you to identify the level of risk youre

comfortable with and recommend a

fund or funds that fit the bill.

What kind of investor are you?

Weve got something for everyone

Adventurous

Investing in an adventurous fund will potentially give

you the highest prospects for growth, but investments

which make up an adventurous fund will come with a

higher risk and could be more volatile.

Balanced

Balanced funds lie somewhere between cautious and

adventurous. They have the potential for higher returns

and carry more risk than cautious funds, but with less

risk than adventurous funds.

Cautious

If you choose a cautious fund, your money will be

invested mostly in lower risk investments. This means

there is less chance of your fund falling in value but

the returns are likely to be lower.

Cash

We also have a Cash Fund which

offers the lowest level of

investment risk and may be

suitable as you get older or in

times of extreme volatility.


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Active

Active funds are managed by a

specialist investment manager or a

team of investment specialists who,

within certain limits, have the freedom

to make specific investments.

Investment managers attempt to use

their knowledge and experience to

beat the returns you could achieve by

simply investing in an index like the

FTSE 100.

Actively managed funds tend to be

more expensive but do aim to deliver

higher returns than passively managed

funds.

Passive

In contrast, passive funds use a

methodology that intends to replicate

the performance of an index.

In passive management, the process is

largely automated and therefore less

expensive, so passive funds tend to

charge less.

What is the difference

between active and passive funds?


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As weve said, OBSR will monitor the

performance of all the active and

passive funds on an ongoing basis and

recommend any changes they believe

are needed to meet the fund

objectives.

You will be able to check the

performance of your chosen funds by

visiting our website

mgmadvantage.com. Youll find daily

unit prices, fund fact sheets and other

useful investment information about

our funds.

Every year, well send you a statement

showing the value of your policy,

including the effects of any

investment growth or falls, plus any

bonuses that have been added.

At each five year review, well look at

how well your funds have performed

over that period and let you know

what regular income amount you can

expect to receive for the next five

years.

This could go up, down or stay the

same, depending on whether your

investments have exceeded or failed

to meet the Required Fund

Performance shown at the last review.

You can change your investment

funds at any time from the range

available.

Keeping track of your

investments

Monitoring performance


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Whatarethekeybenefitsoft

heFlexibleIncom

eAnnuity

TheMGMAd

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IncomeAnnuity

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The J.P. Morgan Cautious Total Return

Fund aims to beat the return on cash

by an average of 3% per year over the

medium term.

The fund has a maximum exposure to

equities of 40%. This means in times

of stock market uncertainty, you wont

be too exposed.

The rest of the fund is made up of

other less volatile investments like

bonds and cash for example.

Actively managed funds

J.P. Morgan Asset

Management facts

In business for more than 170

years

Owned by J.P. Morgan Chase &

Co.

JPMC has assets of US $2.1 trillion

and JPMAM has US $1.1 trillion

assets under management

More than 670 investment

professionals worldwide

6,379 staff worldwide

Source: J.P. Morgan Asset

Management as at 30 June 2009

IMA = Investment Management Association

*Please note that the rebate shown will be deducted from the policy charges

Fund: JPM Cautious Total Return

IMA Sector: Cautious Managed

Annual Management Charge: 1.25%

AMC Rebate: 0.625%*


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The objective of the fund is to achieve

a balance between capital growth and

income, predominately from a

portfolio of UK and International

securities.

The fund invests mainly in equities

(particularly in high quality UK blue

chip companies).

Approximately 25% may be in other

assets such as fixed interest, property

and cash.


Newton facts

Founded in 1978

36.9 billion in assets under

management

Pioneers of team-based, global

thematic investment approach

which identifies themes and

trends that are influencing, or are

likely to influence, economies or

stock markets across the globe

which highlight areas of

investment opportunity

Owned by The Bank of New YorkMellon Corporation

Source:

Newton as at 30 June 2009



Fund: Newton Balanced

IMA Sector: Balanced Managed


AMC Rebate: 0.75%*


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The Jupiter Merlin Growth Portfolio

aims for long term capital growth.

It is an actively managed fund of

funds. That means it invests

predominately in unit trusts, OEICs,

Exchange traded funds and othercollective investment schemes.

The funds held in the Jupiter Merlin

Growth Portfolio invest in international

equities, fixed interest stocks,

commodities and property, primarily

in the UK but with some overseas

investments.


Jupiter facts

Launched in 1985 as a specialistboutique, Jupiter has grown to beone of the UK's most successful andrespected investment management

groups.

18.4 billion in assets undermanagement

Jupiter's funds are managed withthe single aim of providing long-term outperformance for clients

We employ some of the most

respected fund managers in theindustry and over the years wevereceived over 200 industry awards

Source:Jupiter as at 31 July 2009



Fund: Jupiter Merlin Growth Portfolio

IMA Sector: Active Managed


AMC Rebate: 0.75%*


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You can also choose from a range of

passive funds that are rated as

Cautious, Balanced or Adventurous.

The equity and fixed income holdings

of these funds will track different

indexes and are managed by

Vanguard.

The cash holdings are managed by

Insight Investment (see page 13).

These funds offer investors a wide

spread of risk through broadly

diversified exposure to equity and

fixed income markets, at a very low

cost.

Vanguard Investments UK, Ltd was

established in 2009 and is part of The

Vanguard Group.

Passively managed funds

Vanguard Group facts

Established in 1975 and set upthe first indexed mutual fund inthe United States in 1976

Manages over US $1 trillionworldwide

Benefits from more than 30years indexing experience

Source:Vanguard Groupas at 30 June 2009

Vanguard and the ship logo are trademarks of The Vanguard Group, Inc.


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Passive Funds

MGM

Cautious

AMC 0.20%

MGM

Balanced

AMC 0.25%

MGM

Adventurous

AMC 0.30%

Equity 40% 60% 80%

Vanguard FTSE UK Equity Index (FTSE All-Share Index)

Vanguard US Equity Index (S&P US Total Market Index)

Vanguard FTSE Developed Europe ex-UK Equity Index (FTSE Developed Europe ex-UK Index)

Vanguard Japan Stock Index (MSCI Japan Index)

Vanguard Pacific ex-Japan Stock Index (MSCI Pacific ex-Japan Index)

Vanguard Emerging Markets Stock Index (MSCI Emerging Markets Index)

Fixed Income 40% 30% 15%

Vanguard UK Government Bond Index (Barclays Capital Global Aggregate UK Government Bond Index)

Vanguard UK Investment Grade Bond Index (Barclays Capital Global Aggregate UK Non-Government Bond Index)

Vanguard Global Bond Index (Barclays Capital Global Aggregate Bond Index)

Cash 20% 10% 5%

Managed by Insight Investment

Each MGM Advantage passive fund is a basket of Vanguard passive funds, which track the indexes listed below, and the

Insight Investment Cash Fund. The percentage of equities, fixed income and cash holdings in each fund shown below are

target weightings and will fluctuate regularly.


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The aim of the Insight Liquidity Fundis to provide a money market rate of

return.

The fund aims to provide cash

holdings with a market leading yield

and daily liquidity with no penalties.

It has the highest quality securities

and significant diversification (50+counterparties with circa 150

holdings).

Insights Liquidity Fund offers an

attractive alternative to cash deposits

for short to medium-term investment

horizons.

Cash Fund



Fund: Insight Liquidity Fund

IMA Sector: Cash


AMC Rebate: 0.15%*

Insight facts

119 billion of assets under

management

The fund has one of the

strongest long-term track

records in the market and is a

top performing fund over 3 and

5 years on a net of fees basis

The largest active manager of

UK pension assets

Cash management is one of

Insights core capabilities and

they currently manage 21.5

billion of money markets assets

Their liquidity management

strategies are designed to meeta variety of return objectives

Source: Insight as at 31 July 2009


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Questions&

Answers

Whatarethe

keybenefitsoftheFlexibleIncomeAnnuity

Turningyour

pensionsavingsintoanincomeforlife

Moreinformation

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At MGM Advantage, were committed to providing excellentcustomer service and we have a unique Customer Charter

which sets out our service promises to you.

If you ever feel weve failed to deliver on one of our promises,well give you a 25 no quibble payment to say sorry.

Our experienced customer service team is based at ourheadquarters in Sussex and will be happy to answer any

questions you might have.

You can contact us in any of the following ways: -

By telephone 0800 121 65 65

By fax 0845 601 60 70

By email [email protected]

Write to us MGM AdvantageMGM House

Heene RoadWorthingWest SussexBN11 3AT

Here to help


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Telephone calls may be recorded for training and quality monitoring purposes. MGM Assurance Group, Marine and General Mutual Life Assurance Society* Registeredno. 0000006. Authorised and regulated by the Financial Services Authority. MGM Assurance (Trustees) Limited* Registered no. 1279948. MGM Advantage, Designs forRetirement, MGM Assurance, and the MGM logo are Trade Marks of Marine and General Mutual Life Assurance Society. All companies registered in England and Wales.*Registered office MGM House, Heene Road, Worthing, West Sussex, BN11 3AT.

73-102 10/09

Were a founder member of Options, a new industry-wide service provided by Origo. This service has been designed to reduce the amount of time it

takes to transfer money between pension companies so that we can start your annuity payments as quickly as possible. The service is similar to the BACSservice run by the banks where money is electronically transferred between companies.

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