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• Understand O2 Pensions
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• Investment Jargon

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    • Fund Managers
    • Transfer From Hermes To Legal And General
    • Trustees' objectives
    • Investment Jargon
    • Different Classes Of Investment
    • Investment Risk
    • Lifestyle Options
    • Switching Investments
    • Investment Policy
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The investment jargon

Fund Manager

The Fund Manager is the company/person that is responsible for choosing the stocks and shares within a fund in which your money will be invested.

Benchmark

The benchmark is the investment comparison that has been set for each Fund Manager. Typically, the benchmark is an investment index, which comprises stocks and shares that are representative of the market as a whole. Examples of investment indices of which you may have heard are the FTSE 100 Index and the Dow Jones Index.

Active or passive management

You have two types of investment management style available to you; active and passive.

A passive investment style will involve the Fund Manager trying to "track" the performance of the Benchmark; such funds are commonly referred to as "tracker" funds. Typically, the Fund Manager would do this by holding stocks in roughly the same proportions as the index. This approach takes most of the risk out of performing worse than a market. However, it does not remove the risk that the market itself will fall, or aim to beat the market even when the market falls.

An active investment style will involve the Fund Manager trying to "beat", ie perform better than, the Benchmark. The Fund Manager will attempt to do this by using his knowledge of companies to select stocks and shares that will do better than the market on average.

An actively managed fund aims to give higher returns than a passive fund, but there is a risk of it giving lower returns.

Lifestyle

This is the default investment choice, it automatically changes how your money is invested as you approach your intended retirement age. The intention is to maximise returns while you are far away from retirement while switching your money into more "secure" assets as you approach retirement. The exact mechanics of the Plan's lifestyle arrangement are explained on the lifestyle investment option page. You should note that the Trustees maintain the discretion to change the mechanics of the lifestyle option.

This strategy may not be suitable for you and may not provide as favourable an outcome as another investment approach. You must keep the decision to invest in a lifestyle option under regular review.