Fund Value Assessment Report

What is this?

Every year, we assess whether each of our investment funds provides good value for our customers. And if not, how we plan to improve them. This annual assessment is available on our website.

What’s new this year?

In the past, we shared reports with lots of detail. You can still read last year’s report using the link below. Recently, our regulator (the Financial Conduct Authority) simplified the rules across the industry. We can now keep our reports short and clear. This should make it easier for investors to see where we think we can do better, and what we’re doing about it.

Has anything else changed?

No. We still check each fund the same way. We look at how it performs, what it costs, and the quality of service. We also have the same rigorous checks and challenges, including from our Board and independent directors.

Are we offering good value across our fund range?

Yes, we continue to deliver good value through the Defensive, Growth (1 to 3), UK Tracker, and Global Share Funds. We believe that the Bond Fund also offers good value, though its longer-term performance has been affected by market conditions. The Climate Change Fund hasn’t delivered good value to investors, and we’re working on ways to improve its performance over time.

Defensive, Growth (1 to 3), UK Tracker, and Global Share funds: We’re happy with their investment returns based on their individual strategies and investment objectives. We believe that their charges compare well against similar funds.

Bond Fund: We believe it offers good value, especially with recent positive results. That said, the decline in bond markets during 2021 and 2022 (which affected all bond funds) means that investors have experienced a loss over the last five years – the minimum recommended holding period.

Climate Change Fund: This hasn’t provided good value to investors and has underperformed again over the year. The last three years have been tough for most environmental and climate investment funds, but the gap in performance compared to global equity markets is significant. As a result, we plan to review how the fund is managed.

What are our plans to improve value going forward?

We believe we’re offering good value through our Bond Fund, though we recognise that longer term performance remains disappointing. We want to ensure that the fund is well placed to benefit from better bond market conditions in the future. Together with our investment adviser, aberdeen, we’re exploring ways to improve the funds potential – such as adding bonds from other countries or increasing exposure to higher yielding bonds. Our goal is to help the fund deliver more value for our customers, while staying true to its current objective and policy.

Improving returns for the Climate Change Fund and how we show its environmental benefits are a key focus. We’re thinking about changing how it’s managed and reviewing its climate goals. We’ll work with our investment adviser on this, while also considering whether they remain the best fit for the fund. We hope to finish our review by June 2026 and any changes would happen later that year. We’ll write to customers invested in the fund before we make any changes.