Protected Japan Index sub-funds

How the sub-funds work

These sub-funds enable investors to participate in the growth of the Japanese stock market while defining their preferred level of capital protection of 95%, 97.5% or 100% each quarter.

At the start of each quarter a fixed profit rate is declared for each sub-fund. The rate is different for each sub-fund and depends on the level of capital protection of the sub-fund - the higher the protection level, the lower the profit rate. This rate indicates the extent to which the sub-fund will participate in any Japanese market growth. An indication of the likely profit rate is made available by Scottish International Fund Managers shortly before the start of each quarterly period. This enables investors and their advisers to adjust the investment if desired - free of charge. The actual rates for the period are issued shortly after the start of the quarter.

At the end of each quarter, the profit rate is applied to any growth in the Nikkei 225 index over the quarter. This figure is added to the capital protected amount to become the starting value of the sub-fund for the next quarter. The closing level of the index is normally an average value of the index over the last five days of the quarter.

A worked example

Consider an investor who has an investment worth USD20,000.00 at the start of the quarter and has selected the sub-fund with 97.5% capital protection. The Nikkei 225 index stands at 8,000 and the profit rate for this sub-fund for the quarter is 110%. Let us say that the closing level of the Nikkei 225 index is 8,600, a rise of 7.5%. The investment value to be carried forward to the next quarter would be calculated as shown:

Protected amount: 97.5% of USD20,000.00 = USD19,500.00
Bonus: 110% of 7.5% of USD19,500.00 = USD1,608.75
New investment value: USD19,500.00 + USD1,608.75 = USD21,108.75

If the index had fallen, the new investment value would be USD19,500.00 - the protected amount.

These figures are for example only and are not guaranteed.