Standard Life Global Index 40

The Standard Life Global Index 40 Fund invests mainly in a diversified mix of global index funds. It is designed to hold about 40% in global shares, including emerging markets, and about 60% in global bonds and other fixed income investments such as corporate bonds, government backed securities and index-linked bonds. It may also hold cash, deposits, money market instruments and other collective investment schemes.

The Standard Life Global Index 40 Fund is managed on a passive basis, which means it aims to track its chosen markets rather than pick individual winners. It uses index funds and is overseen by Standard Life, with Vanguard Asset Management (Europe) as the underlying investment manager. The fund also reinvests income, so any income received is reflected in the unit price rather than paid out separately.

The Standard Life Global Index 40 Fund is designed for long-term investment, aiming to deliver a combination of income and capital growth over time. Its balanced mix of shares and bonds may suit investors who want global diversification with less equity exposure than a pure stock fund. Because it still includes equities, bonds and emerging markets, its value can rise and fall and it is not risk-free.

The Standard Life Global Index 40 Fund is exposed to both equity and bond market risk, so its value can move with stock market volatility, interest rates and credit conditions. It also carries currency risk, which means overseas investments can lose value if exchange rates move unfavourably. Other stated risks include index tracking risk, counterparty risk and securities lending, which means the fund may not perfectly match its benchmark and may face losses if a trading partner fails to meet its obligations.

The Standard Life Global Index 40 Fund may use a currency hedged share class for part of its overseas exposure to reduce currency risk. It may also use derivatives for efficient portfolio management, to reduce risk or to help meet its investment objective, although it does not make extensive use of them. Derivatives are financial contracts linked to other assets, and they can increase losses as well as gains if markets move sharply.