Staying on track

Making a decision

When you join, you will need to make an investment choice on your Declaration of Participation form. If you are happy to manage your own investments and have the time and knowledge to do so, Self-Select Funds might be the best option for you. If choosing your own investments takes you out of your comfort zone, the NN Perspective fund will manage your savings for you.

When choosing how to invest your account, there are two options to choose from:

If you think you would like to choose from the Self-Select Funds, you might want to read more about the different investment styles and asset classes before making your choice.

NN Perspective

If you do not want to make an investment choice, you will automatically be invested in the NN Perspective fund for your age group. The table below shows which Perspective fund you would invest in:

End of the investment – withdrawal time	Participant’s age	Recommended Perspective
up to 2020	Participant’s age 58+	NN Perspective 2020
2021 – 2025	Participant’s age 55+	NN Perspective 2025
2026 – 2030	Participant’s age 50+	NN Perspective 2030
2031 – 2035	Participant’s age 45+	NN Perspective 2035
2036 – 2040	Participant’s age 40+	NN Perspective 2040
2041 – 2045	Participant’s age <40	NN Perspective 2045

These default funds all invest in the same sub-funds, which have different levels of risk. You will be invested in a different combination of sub-funds, depending on which NN Perspective fund your account is invested in. Your account is moved into different sub-funds based on the age at which you are likely to withdraw your money from your account.

For instance, if you are in an NN Perspective fund where your withdrawal date is 30 years away, over half of your investments will be in equities, which aim to maximise growth but with a higher level of risk. However, as you get closer to retirement, your money will move into more stable funds such as bonds and bank deposits.

You can see an overview of the sub-funds, which make up the NN Perspective funds, in the table below. Click on each sub-fund name to download a fund factsheet.

Sub-fund name	Level of risk	Invests in
NN Savings	Very low	Bills and treasury bonds, bank deposits
NN Bonds	Moderate	Treasury bonds mostly
NN Equity	Relatively high	100% equities
NN Stable Growth	Average	100% equities of foreign companies
NN Balanced	Moderate	50% Equities 50% Bonds

Management fees

As a member of the IMI Employee Pension Plan, you receive preferential rates on the administrative charges to invest in the sub-funds. You pay no transmission fee for the use of the sub-funds, and the Annual Management Fee is never more than 0.60%.

Self-Select Funds

If you want to manage your own investments, you can choose from the following funds. Some of these are passively managed and some are actively managed – for more information, see Investment styles.

Fund	Sub-fund	Investment risk	What is the fund investing in
NN Parasol FIO	NN Savings	Very low	Bills and treasury bonds, bank deposits
	NN Bonds	Moderate	Treasury bonds mostly
	NN Equity	Relatively high	100% equities
	NN Stable Growth	Average	100% equities in foreign companies
	NN Balanced	Moderate	50% equities, 50% bonds
NN SIO	NN (L) Global High Yield	Moderate	High yield bonds
	NN (L) Emerging Markets Debt	Relatively high	100% bonds issued by companies at the emerging market countries
	NN (L) First Class Multi Asset	Average	Equity, bonds, commodities and real estates
	NN (L) Global High Dividend	Relatively high	100% equities in foreign companies
	NN (L) Emerging Markets High Dividend	Relatively high	Foreign treasury bonds and corporate bonds
	NN (L) European High Dividend	Relatively high	100% equities in foreign companies

You can read more about each fund in the fund factsheets.

Changing your investments

If you decide to choose Self-Select Funds, you should keep an eye on your investments and make sure that they are still suitable for you, particularly if your retirement plans change over time.

For example, as you get nearer to retirement, you may prefer not to invest as much in higher-risk funds. Instead, you may wish to invest more in funds that protect the value of your account and are more suitable for the way that you plan to take your account.

You can track and change your investment choices online by logging into your account at www.nntfi.pl

Investment styles

Investment funds can be passively or actively managed.

• Passive funds aim to track a particular stock market index, with the fund’s allocation to individual stocks the same as their weighting in the index.

• Active fund managers make specific investment decisions to try to beat the particular stock market index. Due to the higher level of research and transactions involved, these funds tend to have higher charges than passive funds.

Investment terms explained

Asset classes – An ‘asset class’ is a category of assets or investments, such as equities or bonds. Normally, assets in the same class have similar characteristics, but they can have very different returns or risks. The value of the investments in all asset classes can go up as well as down.

Equities – Long–term investments representing the ownership of companies via stocks and shares. The return on equities comes from growth in the value of the shares, plus any income from dividends. For overseas equities, changes in the foreign currency exchange rates could also significantly affect returns.

Bonds – Fixed interest securities or index–linked investments. These investments are essentially loans, often over a set period, paying a rate of interest which is fixed or linked to inflation or an index. The return is a combination of any interest received and any change in the bond’s value. For overseas bonds, changes in the foreign currency exchange rates could also significantly affect returns.

Diversified asset funds – Diversified asset funds invest in a wider range of asset classes than traditional managed funds do. Typically, they will aim for some sort of targeted return over a particular period of time, for example a return above inflation or interest rates, and will often significantly vary the types of assets they invest in based on market conditions. However, the strategies used to try to achieve these aims may vary widely from manager to manager.

Multi–asset – Funds that invest in a mix of equities, bonds, gilts, cash and alternative investments like property or commodities. The actual weighting of these assets will depend on a number of factors, for example current economic conditions for a Diversified Growth Fund, or ethical criteria for socially responsible investments. Given the diversity of asset classes, a multi–asset fund potentially offers less volatility than a fund of pure equities but may reduce the potential for higher returns.

Property – Funds that include direct investments in land and buildings, as well as indirect investments, such as shares in property companies. Commercial property may take the form of offices, shopping centres, retail warehouse parks and industrial estates. The values of different types of property do not necessarily move in line with each other. The return from direct investments is a combination of rental income and changes in property values. Over the long term, property's average risk and return have been higher than bonds, but lower than equities.

Money market instruments (including cash) – These may include deposits with banks and building societies, as well as governments and large corporations. They also include other investments that can have more risk and return than standard bank deposits. There are circumstances where money market instruments can fall in value. The return comes from any interest received and any change in the value of the instrument.