External Fund Links - Frequently Asked Questions

Here are the answers to some commonly asked questions about this type of fund.

What is an External Fund Link?
An External Fund Link (EFL) is a Standard Life fund that invests in the fund of an external manager. So if you invest in an EFL your money would buy units in the Standard Life EFL instead of the external manager's fund. Our EFL then uses your money to buy units in the external manager's fund, or 'underlying' fund.

How will I know I'm using an EFL?
Our EFLs will always have Standard Life in front of the name of the underlying fund. For example the 'Standard Life Invesco Perpetual High Income Fund' invests in the Invesco Perpetual High Income Fund.

Why do you offer EFLs?
The rules and regulations governing life and pension products often mean we can't allow you to invest directly in the fund of an external fund manager. By offering EFLs, Standard Life enables you to invest in some of these funds indirectly - giving you greater choice.

Do I own units in the underlying fund?
No. You own units in the Standard Life EFL and are not invested directly in the external manager's fund.

Has this always been the case?
Historically, Standard Life did not offer EFLs. Like much of the industry, we would only offer our own funds. By offering external funds we were able to give you a much wider choice.

Is the fund performance the same?
The performance of an EFL is not exactly the same as the external manager's fund. Some differences can occur due to:

  •  Charges - We will charge an annual management fee on our EFL that will not necessarily be the same as you would pay on the underlying fund. The fee you pay on an EFL will cover administration costs for your product as well as the costs of investment with the external fund.
  • Tax - Life and pensions contracts often have different tax rules than the underlying fund, so we need to make allowance for this in our pricing. For example, gains made through investments on life contracts are usually taxed at 20%. When we calculate the value of a fund we always include expected costs and taxes.
  •  Cash - When you buy or sell units in our EFL we then need to buy or sell units in the underlying fund. Due to the time it takes to buy and sell units in the underlying fund, at any point in time there may be a small amount of cash held in the EFL.

For more information about EFLs please call the number on your statement or contact our call centre.