Investing in funds that aren’t based in the UK

Most of the funds we offer to UK investors are domiciled in the UK. This means that the investment manager keeps the assets in the UK and the fund manager is authorised and regulated by the UK Financial Conduct Authority (FCA).

We also offer funds that are domiciled in countries other than the UK. These are often called ‘offshore funds’ and are based in international financial centres in Dublin and Luxembourg.

These funds are registered for sale to investors in the UK and other countries but, unlike domestic funds, they aren’t directly overseen by the local regulator – the FCA, in the case of the UK. This means that investors in offshore funds could have fewer rights and protections than investors in UK authorised funds.

If you have an investment in a fund domiciled in a country other than the UK, you should check what rights you have under the local regulator that oversees that fund.

Because offshore funds aren’t authorised by the FCA, investors are not necessarily entitled to all the protections that are provided to investors in domestic funds.

An important one to be aware of is the Financial Services Compensation Scheme (FSCS). The FSCS protects investors when UK-authorised financial services firms fail by paying compensation. Your investment is usually guaranteed by the FSCS up to an amount of £85,000 across all accounts held with the failed financial services firm.

You may also not be entitled to go to the UK Financial Ombudsman if you have a complaint about your investment.

You might be protected under these schemes if you invest through a UK financial adviser. But if you invest directly with the offshore fund manager it is very likely you won’t be covered. This introduces another layer of risk that you should consider before you invest.

There is often a delay between the time you let us know you want to buy or sell a fund and setting the price of the deal. As a result, there can be a difference between the value of your investment when you let us know you want to trade and the actual price when you buy or sell, especially if markets are moving quickly.

The length of this delay depends on how often a fund trades. UK funds typically trade at least once a day, and so the time between placing your trade and the manager putting a price on it usually won’t be more than 24 hours, depending on when the deal is received. For offshore funds, it can be two days or more.

A longer dealing time could mean a bigger difference between the value of your investment when place a trade and the value when the deal is priced. You should bear these timings in mind when you are buying or selling units in an offshore fund.