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With-Profits Funds

A with-profits fund is a pooled investment

The money you pay in is added together with the investments of other customers. This is then invested in a mixture of shares, bonds, property and cash. We currently have around £3.7 billion invested in our with-profits funds.

These policies share in the profits and losses of the with-profits fund by adding bonuses to each policy. You may get an annual bonus each year but the level of these annual bonuses is not guaranteed. Once they are added they cannot be removed and are guaranteed at certain points, helping make with-profits investments attractive. You may also benefit from a 'terminal' bonus when the policy comes to an end.

All with-profits investments are subject to a 'smoothing' process. In simple terms, some of the investment returns are kept back in the years when the fund does well and used to boost the returns in years when it does poorly.

This is designed to offer a smooth level of returns each year. However, it's important to remember that the value of the investment can go down as well as up, and that you can get back less than invested.

NFU Mutual Financial Advisers can guide you through the things you need to consider when investing your money.

Where is NFU Mutual’s With-Profits Fund invested?

NFU Mutual’s With-Profits Fund is invested in a broad mix of assets both in the UK and abroad. The assets include company shares, property, fixed interest securities and deposits.

The asset mix backing the Capital Access Bond at 01/02/2020 was as follows:

Floating Rate Notes* 85.6%
Cash Deposits 14.4%
Total: 100%

*Floating Rate Notes are bonds that have a variable coupon.

The asset mix backing the with-profits liabilities (other than the Capital Access Bond) was as follows:

Property 17.5%
UK equities 27.5%
Overseas equities 30.0%
Index linked bonds 0.0%
Fixed interest gilts 2.0%
UK corporate bonds 15.5%
Overseas bonds 3.0%
Cash and other assets 4.5%
 Total: 100%

The mix of security ratings (the second highest if there is more than one rating) for our UK corporate bonds was as follows:

AAA                          7.2%
AA 15.3%
A 29.5%
BBB 45.0%
Sub 3.0%
Total: 100%

The asset mixes above were correct at 01/02/2020. It is possible that changes have occurred since that date, resulting from market movements, the investment of new money and changes in our general investment strategy.

Take a look at our with-profits guides for more information.