Sector Credit Fund Institutional Accumulation

Fund objective

OBJECTIVES AND INVESTMENT POLICY Investment Objective To generate income and some growth over the long term (5 years or more) by investing both directly and indirectly in bonds issued anywhere in the world. Performance Target: To exceed the return of SONIA by 2.50% per annum over rolling five year periods (before charges). There is no certainty or promise that the Performance Target will be achieved. SONIA is the Sterling Overnight Index Average and is the representative rate for the return on cash deposits. Investment Policy Portfolio Securities - The fund will have at least 70% exposure to bonds (which are like loans to companies or governments that pay interest) issued anywhere in the world, including in emerging markets. - The fund may also invest up to 25% in loans issued anywhere in the world. - Up to 20% of the fund may be invested in asset backed and mortgage backed bonds. - The fund will gain exposure to a diversified portfolio of bonds and loans from across the global fixed income universe by investing both directly and indirectly via other funds (including those managed by abrdn). - The fund may also invest in cash and assets that can be turned into cash quickly. - The fund will employ techniques to reduce (hedge) risk related to currency movements on non-sterling bonds. - Some assets in which the fund invests are not valued on a daily basis and consequently the fund's share price may not reflect the true value of the fund's assets. Some assets may also have non-daily dealing frequencies and/or longer settlement cycles than the fund itself, which may require the fund to hold additional cash, sell other assets or temporarily borrow to meet short-term liquidity needs, such as redemption requests. Management Process - The management team use their discretion (active management) to strategically allocate investment across a diverse range of fixed income asset classes to achieve the fund's objective. The portfolio consists of allocations to what the management team define as core, tactical and thematic asset classes. - The core allocation is expected to account for a minimum of 50% of the portfolio and consists of investment grade corporate bonds with a maturity of 1-5 years, leveraged loans and asset backed and mortgage backed bonds. - The tactical allocation is expected to account for a maximum of 40% of the portfolio and consists of investment grade corporate bonds with a maturity of over 10 years, sovereign bonds, global high yield bonds and emerging market corporate bonds. - The thematic allocation is expected to account for a maximum of 20% of the portfolio and consists of positions identified by the management team as value opportunities or areas with the potential to enhance returns, such as Asian bonds, subordinated bonds and corporate hybrids. - The team also seek to reduce the risk of losses and the expected change (as measured by annual volatility) in the value of the fund, is not ordinarily expected to exceed 5%. Please Note: The fund's ability to buy and sell bonds and the associated costs can be affected during periods of market stress which could include periods where interest rates move sharply. Derivatives and Techniques - The fund will routinely use derivatives to reduce risk, reduce cost and/or generate additional income or growth consistent with the risk profile of the fund (often referred to as "Efficient Portfolio Management"). - Derivatives include instruments used to manage expected changes in interest rates, inflation, currencies or creditworthiness of corporations or governments. - The fund will routinely use contracts on credit default swap indices in order to manage cash flows. These indices will be consistent with the objective and risk profile of the fund. - The fund may also invest in other funds which use derivatives more extensively. Investors in the fund may buy and sell shares on any dealing day (as defined in the Prospectus). If you invest in income shares, income from investments in the fund will be paid out to you. If you invest in accumulation shares, income will be added to the value of your shares.