Investments
Your guide – June 2015
Zurich International Life
Contents
About the guide
About the guide
2
About our funds
3
Low risk funds
4
Managed funds
5
Automatic investment
strategy (AIS)
8
Mirror funds
10
Glossary11
This is a practical, jargon-free guide to your
investment options with us. It explains our
fund types, how our automatic investment
strategy works, and includes a glossary of
terms you might not be familiar with.
This information is only a summary and may be subject to change without
notice. It was obtained from what we believe to be reliable sources.
However, its accuracy and completeness cannot be guaranteed. Neither
Zurich International Life (Zurich), nor any associated companies, nor
representatives, can accept responsibility for any errors or omissions.
The information contained in this brochure should not be construed as
guidance to the suitability of the markets mentioned. Anyone considering
investing in these markets should seek professional guidance.
Please remember that the value of any investment and the income from it
can fall as well as rise, and you might not get back the amount you
originally invested.
Before you start, ask yourself:
What am I trying to achieve?
It’s important to think about what
you’re investing for.
If you’re using your investment
to pay for your mortgage or
retirement, you might prefer to
put most of your money into
lower risk funds.
On the other hand, you might
just be hoping for capital growth.
In this case, you’ll need to think
about how much you can afford
to lose, and balance this against
the returns you want.
How long can I invest for?
The type of investment you make
might also depend on when you
plan to use the money you’ve saved.
For example, if you only have five
years, you might consider a lower
risk fund, like a bond-based
managed fund.
2
If you’re investing for more than
five years, you might think about
a higher risk, higher return fund,
like a single country or specialist
equity fund.
And if you’re not planning to use
this money for ten years or more,
you might be interested in a smaller
companies or emerging markets fund.
How do I feel about risk?
It’s also important to think about
how much risk you’re prepared
to take. How much can you afford
to lose?
Stock markets tend to rise over
time, but there’s no such thing
as a low risk, high return
investment. Potential higher
returns, unfortunately, go hand
in hand with higher risk, and there
is usually a trade-off between risk
and reward.
The potential for greater long-term
returns is often delivered by
investments that involve
a higher degree of short-term
risk. In comparison, lower risk
investments typically lead to lower
potential rewards, especially in
the long term.
About our funds
Our fund categories
Our charges
Switching
Low risk funds
These funds form the foundation of
our investment range and invest in
cash, money markets and international
fixed-interest securities.
Annual management charge
This charge covers the ongoing
management of the fund; it pays for
our fund managers, our fund accounting
procedures, administration and reporting.
The charges vary between the funds
because some are more complex to
manage than others. For example,
the management of the US dollar Blue
Chip fund is more complicated than that
of the US dollar Money Market fund.
If a switch request is received before the
cut-off time, the unit price you receive
for your switch will be based on the
prices issued by fund managers for
switch instructions that have been
submitted by Zurich on the business
day following acceptance of your
switch request. For switches received
on a Saturday or Sunday, these will be
treated as if received on a Monday or,
where appropriate, the next available
Isle of Man working day.
Managed funds
Our range of managed funds offers
differing levels of risk. The range offers
the benefits of diversification across
equities, cash and fixed-interest
securities that are listed in the world’s
stock markets. The asset allocation
within these funds is managed by
our fund adviser Threadneedle.
Mirror funds
The mirror funds offer access to a
range of specialist funds with more
specific investment criteria than the
managed funds.
The fund information provided
is correct as at the time of
publication
The charges we make for the ‘Low risk
funds’ are dependent on the fund type.
They are expressed as a yearly percentage
amount of the value of each fund and,
with the exception of the Guaranteed
Accumulation funds, are deducted daily
before calculating the unit price. The
management charge for the Guaranteed
Accumulation fund is deducted through
adjustment to the dividend.
Additional charges
Some funds also have additional
charges, separate from our annual
management charges and other
product charges. These cover, for
example, the costs of the audit fees,
directors’ fees and charges for safe
custody of fund assets. Currently
they’re no more than 0.5% p.a. for the
managed funds, although all of our
charges are reviewed regularly and so
could change in the future. Charges
displayed are to two decimal places.
This document should be read
alongside the following product
brochures and terms and conditions:
Vista/InvestPlus
Futura/Lifelong
Harvester
Magnus
Not all products are available in
all regions.
Please note that InvestPlus and
Lifelong are available through
Citibank only. Harvester is only
available through Standard
Chartered Bank.
More information on product charges is
available in the individual product policy
terms and conditions, which are available
on request.
3
Low risk funds
These funds provide a low risk environment for your investment.
The money market funds invest in short-term deposits and securities
which provide a low level of return and the Guaranteed Accumulation
funds which provide a guaranteed return.
Money Market funds
Our money market funds aim to provide
a low-risk investment, with a high degree
of liquidity. Liquidity refers to the ease
of selling an asset without affecting its
price, and funds with high degrees of
liquidity are generally good short-term
investments as they tend to involve little
risk. They are an essential part of a
well-managed portfolio.
Although money market funds are
relatively low-risk, there is the risk that
their returns might end up being lower
than the rate of inflation. They could also
incur losses if the issuers of the securities
they hold default on their payments.
The Sterling Money Market, US dollar
Money Market, Euro Money Market and
Japanese yen Money Market funds invest
in short-term deposits and international,
short-term interest-earning securities.
These securities include deposits,
certificates of deposit, commercial paper
and short-term debt instruments issued
by governments and corporations that
carry investment grade credit ratings.
The Eagle† Money Market fund invests
in the Sterling, US dollar, Euro and
Japanese yen Money Market funds.
The Swiss franc Money Market fund*
and ZI Singapore dollar Money fund**
invest in bank deposits held with
various regulated entities.
Annual management charge
Money Market funds 0.75%
Guaranteed Accumulation funds
(GAFs)
These funds invest in government and
corporate debt, but only in bonds carrying
excellent credit ratings (we take risk
management very seriously).
The GAFs are available in sterling, US
dollars and euros. They let you invest
in more volatile global bond markets,
but the way the dividends are paid
helps protect you against the risk of
losses associated with this volatility by
smoothing the returns.
The GAFs are not available in Qatar
or Singapore.
How the dividends are paid
An interim dividend is declared for
each fund at the beginning of the year.
This is paid into your account every
month, and can’t be taken back once
it’s been paid, as long as you keep your
policy until its maturity or a permitted
withdrawal point (variable by product).
At the end of the year, an annual
dividend is declared for each fund.
If it’s higher than the interim dividend
was, you’ll be paid any extra you’re
owed. If it’s lower, the dividends you’ve
already been paid can’t be reduced.
For details of the dividends declared
for the GAFs, please refer to the GAF
flyer which is available on request.
Market level adjustment (MLA)
The GAFs are designed to provide
guaranteed growth over the medium
term, and are not intended to be
short-term investments to be traded
on a regular basis.
The MLA is a charge designed to protect
investors who stay in the fund until a
permitted withdrawal point. It isn’t a fee
to the company.
The MLA might be charged if you remove
funds out of GAFs before a permitted
withdrawal point. Permitted withdrawal
points vary by product but are typically
at the ten year anniversary of the
investment date into the GAFs, as well as
the normal maturity or retirement date.
To find the GAFs’ permitted withdrawal
points, refer to the GAFs section of your
policy terms and conditions.
The MLA is administered on a case by
case basis, and its amount depends on
when the investor’s funds were invested,
how long they were invested and the
market conditions over this period.
For this reason, each case is assessed
individually to determine whether an
MLA should apply.
It is conceivable that two clients may
apply for an early surrender for the
GAFs on the same day, and only one
may be subject to an MLA.
Annual management charge
Guaranteed Accumulation
funds0.50%
†Please note that funds denominated in the Eagle currency are not available to clients investing through our Qatar and Singapore branches.
*Not available in Singapore.
**Available in Singapore only.
4
Managed funds
These funds combine the money of like-minded investors and then
invest across a wide spread of equities, bonds and cash. This lowers the
potential risk of investing in only equity or bond markets, and also saves
you from the expense and time needed to build individual portfolios
from scratch.
The Cautious funds have less
exposure to fixed-interest
securities.
The Blue Chip funds also invest
in fixed- interest securities but
contain a higher proportion of
international equities.
The Performance funds carry
an even higher concentration of
international equities.
The Adventurous funds invest
almost entirely in equities and
hold the greatest exposure to
emerging markets.
Please remember that investing
in a stock market involves risk
and the past performance of an
investment is not a guide to its
future performance. You could
get back less than the amount
originally invested when you sell
your investment.
100%
90%
80%
30%
20%
10%
Adventurous
50%
40%
Performance
70%
60%
Blue Chip
The Defensive funds carry the
lowest risk and invest mainly in
fixed-interest securities such as
corporate and government bonds.
All our managed funds are
available in US dollars, sterling
and euros. The Blue Chip funds,
Performance funds and
Adventurous funds are also
available in Eagles to customers
in Hong Kong, Bahrain and
the UAE. The Eagle currency is
not available in Singapore.
Cautious
About each fund
There are five types of managed
funds, each with a different mix of
equities and fixed interest securities
or bonds, which gives them
different levels of risk.
Managed funds –
approximate bond/equity split
Defensive
Although we set the investment strategy and process, we leave it to the
experts to recommend the best investments. Our managed funds are
actively managed by Threadneedle, so they’re left in the hands of
professional fund managers.
0%
Equities
Bonds
Source: Zurich International Life Limited as at 01/12/14
Investment charges
As you would expect, an
investment service of this nature
costs money. Our charges reflect
this professional active input.
Annual management charge
Managed funds
1.50%
5
Defensive funds
These lower risk funds invest in
international government and corporate
debt, with a proportion of the fund
invested in international equities, with
the majority of the fund made up of
assets matching the underlying
fund currency.
The Defensive funds have the lowest
risk profile of the managed funds
and the aim is to provide a lower
risk environment with some potential
for medium to long-term growth.
Cautious funds
These funds invest primarily in fixedinterest securities but carry a higher
proportion of equities than the
Defensive funds. The majority of the
fund will invest in assets matching the
underlying fund currency and the aim
is to provide a lower risk environment
with some potential for medium to
long-term growth.
US dollar Defensive fund
asset allocation benchmark
Dollar bonds 77.5%
US equities 14.2%
Other equities 4%
Cash 1.8%
UK equities 1.2%
Cash 2.5%
Other bonds 1.4%
Global equities 5%
European equities 2%
US equities 15%
Source: Zurich International Life Limited as at 01/12/14
US dollar Cautious fund
asset allocation benchmark
Dollar bonds 57.5%
US equities 35%
Cash 2.5%
Global equities 5%
Source: Zurich International Life Limited as at 01/12/14
Blue Chip funds
These funds invest in companies which
are well-established, financially strong
and nationally recognised in their
country of listing. The funds invest in
equities and a proportion of fixedinterest securities with the majority of
the fund normally invested in assets
matching the underlying fund currency.
In terms of risk, the Blue Chip funds sit in
the middle of the managed funds range
with a more balanced split between
bonds and equities than the other funds.
The aim is to accept a moderate degree
of risk with the potentials for medium to
long-term growth.
6
Dollar bonds 75.4%
US dollar Blue Chip fund
asset allocation benchmark
US equities 50%
Dollar
bonds 37.5%
Cash 2.5%
Global equities 10%
Source: Zurich International Life Limited as at 01/12/14
Performance funds
These funds invest in equities and a
proportion of fixed interest securities.
The majority of the holdings in these
funds are normally invested in assets
matching the currency of the fund,
whilst the remainder is invested in global
equity and fixed-interest markets.
The aim is to accept a higher degree
of risk with the potential for long-term
growth.
Adventurous funds
These funds invest primarily in
equities with a lower exposure to
fixed-interest securities. The risk profile
of these funds is the highest of the five
portfolios and the funds can invest in
opportunities worldwide without any
restrictions on the currency of the
underlying investment.
The aim is to accept a higher
degree of risk with the potential for
long-term growth.
US dollar Performance fund asset
allocation benchmark
US equities 55%
Dollar
bonds 17.5%
Cash 2.5%
Global equities 25%
Source: Zurich International Life Limited as at 01/12/14
US dollar Adventurous fund
asset allocation benchmark
Cash 2.5%
Global equities 60%
US equities 37.5%
Source: Zurich International Life Limited as at 01/12/14
7
Automatic investment strategy (AIS)
With AIS we’ll automatically switch your savings from higher-risk
equity-based funds to lower-risk money market and bond-based funds
as you move closer to your policy maturity. This means you’re taking
the most risk in the earliest part of your policy, when there’s time left
to make up for any losses.
The AIS consists of five investment portfolios, made up of different proportions of our managed funds, which we’ll switch your
policy between as it gets closer to its maturity date. Each portfolio carries less risk than the previous one.
Portfolio 1
If your policy has over 20 years until it
matures, we’ll invest it in this higher-risk
portfolio. It’s made up mostly of a
diverse spread of equities which,
although volatile in the short term, can
be expected to provide the greatest
gains over the long term.
Portfolio allocation
AIS is available in US dollars, sterling
and euros.
Adventurous
fund 80%
Performance
fund 20%
The Performance funds typically carry
a small amount of fixed investment
securities. The Adventurous funds invest
almost entirely in equities and hold the
greatest exposure to emerging markets.
Portfolio 2
Between 11 and 20 years to policy
maturity, we’ll put your savings in this
portfolio. It’s still heavily invested in
equities, but in a lower proportion than
Portfolio 1, meaning it carries slightly
less risk.
The introduction of a small percentage
of the Blue Chip fund at this stage
increases the investment in lower-risk
fixed-interest assets. The Performance
funds also invest in fixed-interest
securities but contain a higher
proportion of international equities.
8
Portfolio allocation
Adventurous
fund 40%
Blue Chip
fund 20%
Performance
fund 40%
It’s available on Vista/InvestPlus
policies issued from January 2005.
Portfolio 3
If your policy is between 6 and 10 years
to maturity, we’ll move it to this
portfolio.
The Defensive funds carry the lowest risk
and invest mainly in fixed-interest
securities such as corporate and
government bonds. The Cautious funds
have less exposure to fixed-interest
securities, with approximately 40%
invested in equities.
Portfolio 4
Policies between 3 and 5 years to
maturity will be invested in this
portfolio, which reduces the exposure to
equities and increases the amount of
fixed-interest securities. It aims to
consolidate any earlier gains.
Portfolio allocation
Cautious
fund 20%
Blue Chip
fund 30%
Portfolio allocation
Defensive fund 50%
Blue Chip
fund 20%
A 50% holding in the Defensive fund
and 30% holding in the Cautious fund
aims to provide a lower risk environment.
Portfolio 5
Performance
fund 40%
Defensive
fund 10%
Cautious fund 30%
Portfolio allocation
When your policy only has two years to
go to its maturity, we’ll move it to this
portfolio. It’s the most conservative,
with the least exposure to equities,
and its aim is to maintain the value
of your existing investment.
Defensive fund 50%
Money Market
fund 50%
9
Mirror funds
Each of our mirror funds invests in a fund selected from a leading
investment management organisation.
Our mirror funds offer access to individual regions, countries, assets and sectors. Each has its own specific investment criteria,
and is managed by a carefully selected fund manager.
What are the benefits?
What’s available?
• You can access a range of funds
Equity funds
We offer a range of equity funds from
global funds to single country and
emerging market funds. Smaller
companies funds also feature at both
a regional and single country level.
in a range of major currencies.
• You can access major and
emerging markets, worldwide.
• You can construct a portfolio
tailored to your risk profile.
• Our mirror funds benefit from
the expertise of some of the
world’s leading investment
managers.
What are the risks?
• Please remember that past
performance is not a guide to
future performance. The value
of any investment and the
income from it can fall as well
as rise as a result of market and
currency fluctuations and you
may not get back the amount
originally invested.
• Investing in mirror funds could
result in the possibility of large
and sudden falls in the prices
of shares. The shortfalls on
cancellation or loss on realisation
could be considerable. You could
get back nothing at all.
• When investing into mirror funds,
the charges, expenses and
taxation of the underlying funds
vary and performance may differ.
10
Bond funds
These include international and
regional funds, as well as single
country and emerging markets funds.
Sector themed funds
Health, technology, property, energy
and commodities funds are amongst
the themed funds available.
Alternative investments
We have a range of alternative
investments available.
Further detailed information on the
range of mirror funds, mirror fund
managers and charges can be
found in the ‘Mirror funds –
Your guide‘ brochure.
Charges
As you would expect, an investment
service of this nature costs money.
It is our aim, however, to beat inflation
and generate genuine personal wealth
over time. Our charges reflect this
professional active input.
Zurich’s mirror fund
management charge
This charge covers our fund accounting
procedures, administering and reporting.
The charge we make for this service is
detailed below and is shown as a
percentage per year. It is deducted
daily before calculating the unit price.
Underlying fund annual
management charge
This is charged by the managers of
the fund that our mirror fund invests in.
It covers fees and costs incurred in the
running of these underlying funds.
Some mirror funds may also have a
performance fee levied by the underlying
fund manager. These charges will be
reflected in the unit price of the
mirror fund.
Distributor fee
This is a fee paid by some funds to their
distributors. Your relevant financial
professional will make sure you know if
it applies to any of your funds. It’s taken
from the fund charge quoted and
rebated to the introducing broker via
a commission sharing arrangement.
Applications are subject to compliance
with local regulations.
The underlying fund annual
management charges are in addition
to the mirror fund management
charge of 0.75%.
Glossary
Asset – Anything that an individual or
a corporation owns that has economic
value to its owner. Assets can be divided
into categories based on their type.
The major asset categories are bonds,
equities, property and cash.
Asset allocation – The process of dividing
a portfolio among major asset categories.
Bond – An investment in a company or
government’s debt. The investor loans
the company or government money
for a defined amount of time and at
a specified interest rate.
Capital growth – An increase in the
value of an (investment or real estate)
asset that means it is worth more than it
was bought for. This gain is not realised
until the asset is sold.
Certificates of deposit (CD) – A savings
certificate which entitles the bearer to
receive interest. A CD specifies a maturity
date and an interest rate and can be
issued in any currency. CDs are generally
issued by commercial banks.
Commercial paper – A short-term
debt issued by a company. In case of the
company’s default, it does not provide
any compensation, but the risk of default
is generally low due to the issuers being
usually of high credit rating.
Diversification – Mixing a wide variety
of investments within a portfolio. It is a
way of managing risk by minimising the
impact of any one investment on overall
portfolio performance.
Eagle – A currency developed by
Zurich to help spread currency risk.
Each Eagle is made up of 1 pound
sterling, 2 US dollars, approximately
2 euros and 500 Japanese yen.
As the value of these currencies changes,
so does the value of the Eagle.
To find out what the Eagle is currently
worth, please refer to the monthly
investment bulletin.
Please note that funds denominated
in the Eagle currency are not
available to customers investing
through our Qatar or Singapore
branches.
Emerging markets – Emerging markets
tend to be more volatile than established
markets due to uncertainty within the
political scene and domestic currency.
The term refers to countries that are
starting to participate globally by
implementing reform programs and
undergoing economic improvement.
Fixed-interest securities – A security
with an interest rate that will remain the
same for its entire lifetime, for example
a bond.
Investment grade – A rating for a
bond. An investment grade bond is
judged likely enough to meet payment
obligations, so the probability of capital
loss for the bondholder is low. Usually
categorised as BBB and higher by S&P
or as Baa and higher by Moody’s.
Liquidity – The degree to which an
asset or security can be bought or sold
in the market without affecting the
asset’s price. Liquidity is characterised by
a high level of trading activity. It is also
known as the ability to convert an asset
to cash quickly.
Portfolio – The group of assets, such
as stocks, bonds and cash held by an
investor. To reduce their risk, investors
tend to hold more than just a single
stock or other asset.
Rate of return – The gain or loss for
an investment in a particular period,
consisting of income plus capital
gains as a percentage of the whole
investment. Usually, the more risk
you take the greater the potential for
higher return and loss.
Sector – A particular group of funds
that specialise in the same industry or
market area.
Inflation – the increase in the general
level of prices in an economy over time,
which reduces the purchasing power
of money.
11
Buying a life insurance policy is a long-term commitment. An early termination of the
policy usually involves high costs and surrender value may be less than the total premium
paid. This is not a contract of insurance. The precise terms and conditions of the plan are
specified in the policy contract.
The fund and policy details, including the full list of applicable fees and charges, are
available in the respective fund factsheet, product highlight sheet, product summary and
policy contract.
Important information
Zurich International Life is a business name of Zurich International Life Limited.
Zurich International Life Limited is fully authorised under the Isle of Man Insurance Act 2008 and is regulated by
the Isle of Man Government Insurance and Pensions Authority which ensures that the company has sound and professional
management and provision has been made to protect policy owners.
For life assurance companies authorised in the Isle of Man, the Isle of Man’s Life Assurance (Compensation of Policyholders)
Regulations 1991, ensure that in the event of a life assurance company being unable to meet its liabilities to its policy
owners, up to 90% of the liability to the protected policy owners will be met.
The protection only applies to the solvency of Zurich International Life Limited and does not extend to protecting
the value of the assets held within any unit-linked funds linked to your policy.
Policy owners will not have the protection of the UK Financial Services Compensation Scheme.
Not for sale to residents or nationals of the United States including any United States federally controlled territory.
Threadneedle is the brand name for Threadneedle Asset Management Limited. Threadneedle Asset Management
is a fund adviser to Zurich International Life Limited. Threadneedle Asset Management Limited is authorised and regulated
by the Financial Conduct Authority.
Zurich International Life Limited (Singapore branch) is licensed by the Monetary Authority of Singapore to conduct life
insurance business in Singapore. Member of the Life Insurance Association of Singapore. Member of the Singapore
Financial Dispute Resolution Scheme.
Zurich International Life Limited is registered in Bahrain under Commercial Registration No. 17444 and is licensed as an
Overseas Insurance Firm – Life Insurance by the Central Bank of Bahrain.
Zurich International Life Limited is authorised by the Qatar Financial Centre Regulatory Authority.
Zurich International Life Limited is registered (Registration No. 63) under UAE Federal Law Number 6 of 2007,
and its activities in the UAE are governed by such law.
Calls may be recorded or monitored in order to offer additional security, resolve complaints and for training, administrative
and quality purposes.
Zurich International Life Limited which provides life assurance, investment and protection products and
is authorised by the Isle of Man Government Insurance and Pensions Authority.
Registered in the Isle of Man number 20126C.
Registered office: 43-51 Athol Street, Douglas, Isle of Man, IM99 1EF, British Isles.
Telephone +44 1624 662266 Telefax +44 1624 662038 www.zurichinternational.com
Zurich International Life Limited acting through its Singapore branch at Singapore Land Tower #29-05,
50 Raffles Place, Singapore 048623. Telephone +65 6876 6750 Telefax +65 6876 6751.
Registered in Singapore No. T05FC6754E.
Zurich Intermediary Group Limited, authorised and regulated by the Financial Conduct Authority.
Registered in England and Wales under company number 0190911.
Registered office address: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX.
MSP10986 (124634A13) (07/15) RRD