Stocks and Shares ISA FAQ

What is an ISA?

An ISA (Individual Savings Account) is the tax privileged personal investment plan which replaced PEPs and TESSAs on 6th April 1999

From 6th April 2010 the amount you can invest in an ISA increased to £10,200 in each tax year. Up to £5,100 can be invested in cash and the remainder into stocks and shares. Alternatively, the full amount can be invested into stocks and shares if you wish.

The value of tax benefits depends upon individual circumstances, and may be subject to change in the future.

Am I eligible?

To open an NFU Mutual Stocks and Shares ISA, you must be aged 18 or over and be resident and ordinarily resident in the UK for tax purposes or, if not so resident, you perform duties which, by virtue of Section 132(4)(a) of the Income and Corporation Taxes Act 1988 (Crown Employees Serving Overseas) are treated as being performed in the UK or you are married to or a civil partner of a person who performs such duties.

What is the NFU Mutual Stocks and Shares ISA?

The NFU Mutual Stocks and Shares ISA invests solely in stocks and shares through an NFU Mutual OEIC. It is designed to maximise growth prospects and does not invest in cash. The value of a Stocks and Shares ISA can go down as well as up and you may not get back what you invested.

NFU Mutual does not offer a Cash ISA Option.

What do my contributions buy?

Your investments buy shares in one or more of the funds within an NFU Mutual OEIC at their current price.

How much might it pay out?

You can request an illustration of potential benefits by calling our Customer Services Team free on 0800 622 323.

The actual amount will, however, depend on the performance of your chosen fund(s) and any withdrawals made.

How much can I invest?

From 6th April 2010 the amount you can invest in an ISA increased to £10,200 in each tax year

Regular savings:

	If you want to contribute on a monthly basis, the current minimum amount is £25 per month.
	From the 6th April 2010 the maximum monthly amount that you can contribute is £850pm, provided you are not investing in an ISA with another provider.
	You can stop, restart, increase or decrease your regular amounts at any time.

Lump sum investments:

	The minimum lump sum you can contribute to open your ISA is £1,000.
	£1,000 is also the minimum lump sum top up you can make (or less if required to reach the overall maximum investment limit).

Can I take money out of my ISA?

Yes. You can write to us at any time and cash in some or all of your shares but, if you do not surrender them all, you must currently leave at least £1,000 invested and the withdrawal itself must be at least £500. You should remember that if you make withdrawals, the amount of your capital will reduce if the growth of your investment does not exceed the level of withdrawals taken.

Does the Stocks and Shares ISA produce an income?

Yes. You can choose to take the income generated if you wish. Alternatively, the income generated will automatically be reinvested.

Can I transfer my existing ISA to the NFU Mutual Stocks and Shares ISA?

Yes. You can transfer from another stocks and shares ISA that invests solely in stocks and shares, or from an old Insurance ISA. You can also transfer your investment from the Shrewd Savings Plan ISA (NFU Mutual's With-Profits based stocks and shares ISA) if you wish. We can accept transfers from cash ISAs.

What funds are available to invest in?

There are eight funds to choose from:

1. Adventurous Portfolio Fund

Risk Rating: Medium/High

Objective: The investment objective of the Adventurous Portfolio Fund is to provide high long-term capital growth.

Policy: The Adventurous Portfolio Fund will invest principally in other funds managed by N.F.U. Mutual Unit Managers Limited with the balance invested in third party funds with compatible objectives. It is intended that through the funds of N.F.U. Mutual Unit Managers Limited and these other funds, the fund will gain exposure to UK and International equities typically with 40%–60% in UK companies, 40%–50% in International equities and the remainder in fixed income securities, cash and money market instruments. The high equity content is intended to achieve an appropriate balance between risk and reward.

2. Balanced Portfolio Fund

Risk Rating: Medium

Objective: The investment objective of the Balanced Portfolio Fund is to produce long term capital growth and moderate income.

Policy: The Balanced Portfolio Fund will invest principally in other funds managed by N.F.U Mutual Unit Managers Limited with the balance invested in third party funds with compatible objectives. It is intended that through the funds of N.F.U. Mutual Unit Managers Limited and these other funds, the fund will gain exposure to UK and International equities with approximately 25% in fixed income stocks and cash. The fund will typically maintain 40%–50% of its exposure in UK companies and 25%–35% in International companies with the balance in fixed income and cash.

3. Cautious Portfolio Fund

Risk Rating: Low/Medium

Objective: The investment objective of the Cautious Portfolio Fund is to generate some potential long term capital growth and stable income.

Policy: The Cautious Portfolio Fund will invest principally in other funds managed by N.F.U. Mutual Unit Managers Limited with the balance invested in third party funds with compatible objectives. It is intended that through N.F.U. Mutual Unit Managers Limited funds and these other funds, the fund will gain exposure to a mix of UK and International equities, fixed income stocks, cash and property. The fund will typically maintain 25% – 35% exposure to UK companies and a similar proportion in fixed income stocks with the balance in International equities, property and cash.

4. Global Developing Markets Fund

Risk Rating: High

Objective: To achieve long-term capital growth through diversified exposure to emerging
markets of the world.

Policy: To achieve long-term capital growth by investing 80% or more of the assets directly or indirectly in emerging markets as defined by the World Bank, without geographical restriction. The fund will invest mainly in equity securities. The fund may use financial derivatives but only for hedging or efficient portfolio management purposes.

5. Global Growth Fund

Risk Rating: Medium/High

Objective: To achieve long-term growth through investment in any country and in any economic sector of the world.

Policy: Although investments will be made in any country, the fund is biased towards the world’s major equity markets, particularly North America, Europe and Japan. The fund will invest mainly in equity securities. The fund may use financial derivatives but only for hedging or efficient portfolio management purposes.

6. UK Growth Fund

Risk Rating: Medium/High

Objective: To achieve long-term capital growth with a moderate but growing income, by maintaining a portfolio mainly of high quality UK ordinary shares in investment sectors where opportunity for growth is most favourable.

Policy: The fund will invest in ordinary shares and convertible stocks of UK companies. The fund may use financial derivatives but only for hedging or efficient portfolio management purposes.

7. UK Equity Income Fund

Risk Rating: Medium/High

Objective: To achieve increasing income with some capital growth by investing in the shares of a range of UK companies listed on the London Stock Exchange and operating in those market sectors forecast to generate stable and growing income.

Policy: The fund will invest at least 80% of its assets in equities quoted on the UK stock market with a target net of tax yield on the underlying portfolio of at least 110% of the FTSE All Share yield. The fund may use financial derivatives but only for hedging or efficient portfolio management purposes.

8. Gilt and Corporate Bond Fund

Risk Rating: Low/Medium

Objective: To provide a return from a portfolio investing mainly in gilts and investment grade corporate bonds.

Policy: The fund will invest in a portfolio of bonds and other fixed and floating rate securities denominated mainly in sterling and issued by governments, government agencies, supra national and corporate issuers (including preference shares). Corporate bonds and other securities purchased by the fund will be of investment grade. The fund may use financial derivatives but only for hedging or efficient portfolio management purposes.