Information About RLUM Unit Trusts

What is a Unit Trust?

A Unit Trust is an open ended collective investment scheme that pools customers money with that of other investors.

A RLUM unit trust is designed to provide you with easy access to a variety of investments, from the UK and overseas, such as shares, corporate bonds and government gilts. These investments are packaged into different funds and are actively managed on your behalf to ensure that they meet the funds’ investment goals.

The investment goals will vary from fund to fund and may for example:

(i) aim to maximise investment growth over time OR
(ii) aim to provide you with a consistent level of income.

If your unit trust is part of an Individual Savings Account (ISA) then your investment is tax efficient and is free from both Income tax and Capital Gains tax.

Units

Every investment you make purchases a number of units in a fund.

The unit price will change as the value of the investments change.

At any time, the value of your fund is your total number of units held multiplied by the current unit price.

Where your money is invested

Where your money is invested depends on which funds you chose:

• most of our funds are invested in shares
• some funds are invested in less risky corporate bonds and government gilts
• your fund may be invested in particular geographical regions such as the US or Europe.

To help reduce your risk and to benefit from diversification, you can spread your investments across a number of our funds.

You may wish to ensure that the portfolio of funds you choose reflects your attitude to risk.

For all funds, your returns may go up or down and you may get back less than you invested.

You should refer to the latest monthly fund fact sheets for more information about each of the funds.

Income or distributions

For some funds you have the option to take a regular investment income rather than us automatically reinvesting your investment returns for you. If you take this option then your investment will not be worth as much as if you had chosen to reinvest the income.

If you choose to reinvest your income then we will automatically allocate this to your investment. You can ask us to change how your distributions are dealt with at any time.

Taking your money

You can cash in part or all of your investment at any time. However, withdrawing money will reduce the overall value of your investment. Please note that our minimum withdrawal is £250.

Once we have received your instruction to cash in your investment, either in part or in full, and this has been processed by us, you will not be able to change your mind and we will issue payment to you. Further details can be found in the Supplementary Information Document.

If your investment is part of an ISA then you should remember that the proceeds are free from both Income Tax and Capital Gains Tax.

If you are not making monthly subscriptions and the value of the units held in the unit trust is less than £500, or if you asked to sell units and this would take the value below £500, we may sell the whole unit holding and pay the proceeds to you.

Keeping you safe from fraud

An Anti – Money Laundering directive has been introduced which means whenever you deal with us we may need to verify your identity or the identity of certain individuals connected to the product. At Royal London we do this electronically to make things easier for you. If you’d like to know more about how we use your information, visit our full privacy notice.

Additional Investments

You can make additional investments at any time. However, please note that there are limits on how much you can invest into an ISA in any tax year. You can view the current ISA limit by visiting Important information about your Stocks & Shares ISA. You can still invest anything over this amount by investing outside the ISA wrapper.

If you change your mind

The documentation you receive as confirmation of your purchase/instruction will include a Cancellation Notice; you will then have 30 days in which to inform us of your wish to change your mind. If you want your investment to continue, you don't need to do anything. If the value of your investment falls between us investing your money and you returning the cancellation notice, we will return to you the lower amount. Full details of your cancellation rights can be found in our Supplementary Information Document.

Client Money

Any cash held in your account will be held separately from cash belonging to us. The banks we use acknowledge your money is held as client money which is protected in the event of the insolvency of RLUM Ltd. In the event of the insolvency of one of the banks we use, any client money we hold for you is protected under the Financial Services Compensation Scheme (FSCS) up to a maximum of £85,000 for each client and bank with whom client money is held. This limit is applied to 4 banks that are separately authorised and can only be applied once, therefore banks operating under different brands within the same authorisation are covered under the same limitation. The compensation limit of £85,000 includes any other money held by you in accounts with the authorised banks we use, therefore if you have current or deposit accounts with the same bank these will all count towards the compensation limit of £85,000. For further information visit fscs.org.uk.

Our client money arrangements for ISA and unit trust investors

RLUM Ltd maintain separate client money accounts with third party banks outside of The Royal London Group. We use the Delivery versus Payment* (DvP) exemption to process payments when units are purchased until your money is cleared  through the normal banking process, during which time the money is not protected as client money. Any request to  withdraw your money will be held as client money whilst we process your instruction and will remain so until you present your cheque at your bank. Funds held in such client money accounts are held on trust and segregated from our own funds. Interest is not paid on any money held in this way. (*DvP or delivery versus payment, describes the process whereby money is held temporarily outside of client money whilst investment instructions are processed and the money is cleared for payment by the bank.)