Fund Objectives

		Type of Fund
	Risk Level	Pension	Life	OEIC
Ethical	Adventurous	v	v	v
European	Medium / adventurous	v	v	v
Far Eastern	Medium / adventurous	v	v	v
Gilt and Fixed Interest	Cautious / medium	v	v	-
High Income (UK Equity)	Medium	v	v	v
Index-Linked Gilt	Cautious / medium	v	v	-
International Growth	Medium / adventurous	v	v	v
Investment Trusts	Medium / adventurous	v	v	v
Japanese	Medium / adventurous	v	v	v
Managed	Medium	v	v	-
Money (Deposit fund)	Cautious	v	v	-
North American	Medium / adventurous	v	v	v
Pelican (UK Equity)	Medium	v	v	v
Property	Medium	v	v	-
Smaller Companies	Adventurous	v	v	v
Special situations	Adventurous	v	v	v
UK FTSE All Share Index-Tracking	Medium	v	v
UK FTSE 100 Index-Tracking	Medium	v	v
Guaranteed Equity	Cautious / medium	v	v	v
With Profits	Medium	v	v	v

Risk/return relationship explained:
Below are the different levels of risk explained to help you when you select your funds.

Cautious
Deposit based investments where capital is secure even if it means giving up potential growth. These accounts generally provide a steady increase and easy access.

Cautious/Medium
A balance of investments offering some security with potential for long-term growth/income. The value can go up and down.

Medium
A balance of investments offering a wide spread of investment with the potential for long-term growth/income. The value can go up and down.

Medium/Adventurous
Offering a narrower spread of investment in such areas as UK shares and international shares, the value of the funds can go up and down and potentially by greater amounts than the funds in the medium category.

Adventurous
Looking to maximise the potential returns from investments in stocks and shares, these funds involve a significantly higher risk. The ups and downs will potentially be more severe and frequent than the approaches described above.

Further Information:
Unit-linked Life and Pension Funds are provided by Halifax Life, and managed by Insight Investment. OEIC funds are provided by HBOS Investment Fund Managers, and managed by Insight Investment. Prior to March 2001, when Halifax purchased the operating assets of The Equitable Life Assurance Society, some of these funds were Equitable Life and Equitable Investment Fund Managers funds. As underlying investments are based upon the pre-existing Equitable and EIFM funds, past performance has been shown over the period since their inception.

Fund name	Fund objective
Ethical	The objective of the Ethical Fund is to achieve capital growth in the long term by investing in companies whose activities are considered ethical both in terms of their primary activities and the means of achieving them. The fund has a policy of investing internationally in companies with above-average potential for growth.The majority of the portfolio will be invested in the following areas: pollution control, environmental protection, efficient utilisation of material and energy resources, clean fuel and alternative energy systems, healthcare services and medical technology and enabling technologies considered to be beneficial to society. Additionally, the fund will strive to avoid investments in companies involved in any of the following areas: alcohol, animal testing, armaments, banking, child labour, fur trade, gambling, links with undemocratic regimes, nuclear power production, polluting the environment, pornography and tobacco. The Ethical Fund's level of risk principally derives from its international nature (i.e. currency risk) and the restriction on the degree of diversification that is possible within the parameters of the investment policy, which result in higher risk.
European	The European Fund offers access to a diversified portfolio of predominantly the larger capitalised European stocks (excluding UK) but is potentially more volatile than a fund that invests solely in similarly capitalised stocks in the UK because of the currency risk involved. The investment concentrates the core of the portfolio on large companies whilst maintaining a reasonable presence in medium and small sized companies with above-average potential for growth. The investment objective of this fund is to achieve capital growth in the long term by investing mainly in European companies excluding the UK.
Far Eastern	The Far Eastern Fund is a medium/adventurous risk fund. The fund can be expected to provide a greater degree of volatility than many of the other funds, being symptomatic of the markets in which the fund is invested. There is also exposure to the currency movements of the different areas in which the fund is invested. The fund will concentrate the core of the portfolio on large companies whilst maintaining a reasonable presence in medium and small sized companies with above average potential for growth. The fund will invest mainly in transferable securities.  It may also invest in collective investment schemes and derivatives. Derivatives may be used for the purposes of investment as well as efficient portfolio management. The investment objective of this fund is to achieve long term capital growth by investing mainly in Far Eastern companies (excluding Japanese companies).
Gilt and Fixed Interest	The Gilt and Fixed Interest Fund's return is derived mainly from an actively managed portfolio of gilt-edged and other fixed-interest investments, including money on deposit. This fund aims to produce a high level of income with the possibility of capital growth if, for example, interest rates fall.
High Income (UK Equity)	The High Income Fund aims to achieve above-average portfolio yield, in relation to the FTSE All-Share Index. The fund will select companies with a high probability of providing a rising income and capital growth over the longer term. Convertible stocks and bonds which provide a higher yield than equities will also be considered for the portfolio. The investment objective of this fund is to provide a high and increasing income, together with prospects of capital appreciation over the longer term, derived mainly from a diversified portfolio of shares in UK companies.
Index-Linked Gilt	The Index-Linked Gilt Fund's relative performance will depend on the long-term outlook for inflation. This fund aims to maximise the overall return on a portfolio of index-linked securities issued by HM Government by investing in Government index-linked, gilt-edged securities.
International Growth	The International Growth Fund is a widely diversified portfolio that is subject to the currency risk associated with the areas of investment. The fund will concentrate the core of the portfolio on large companies whilst maintaining a reasonable presence in medium and small-sized companies with above-average potential for growth. The investment objective is to achieve capital growth in the long term by investing in a diversified global portfolio of companies.
Investment Trusts	The Fund of Investment Trusts is internationally invested and exposed to currency risk. There is a significant degree of diversification provided by the underlying investment trusts' investment in a large number of different companies. The fund will select companies which the managers believe are investing in attractive markets and having a manager expected to outperform the relevant asset category. The portfolio will also include trusts that are likely to benefit from reconstruction. The investment objective of this fund is to achieve capital growth in the long-term by investing mainly in investment trust companies.
Japanese	The Japanese Fund is a medium/adventurous risk fund. In addition to the market risk there is a currency risk, principally that of the yen against sterling. The fund will concentrate the core of the portfolio on large companies whilst maintaining a reasonable presence in medium and small sized companies with above average potential for growth. The fund will invest mainly in transferable securities. It may also invest in collective investment schemes and derivatives. Derivatives may be used for the purposes of investment as well as efficient portfolio management.  The investment objective of this fund is to achieve long term capital growth from investments in a broad range of Japanese companies.
Managed	The Managed Fund has considerable diversification and includes a proportion of international assets which is subject to additional risk associated with overseas investments. This is offset, to some degree, by investing in fixed-interest securities. UK and overseas equities, gilt-edged and fixed-interest stock and property are acquired through the Society's other funds and/or by direct investment. Investments are made at the discretion of the Society's investment managers, whose objective is to maximise the overall return from investments covering UK and overseas equities, gilt-edged and fixed-interest stock and property.
Money (Deposit fund)	The Money Fund offers security of capital with competitive short-term interest rates. The investment is in short-term deposit instruments, thus allowing sufficient liquidity in a fund that is principally a short-term investment vehicle for investors when switching between equity funds. This fund aims for maintenance of capital values, with reinvestment of income at attractive rates of interest on short-term deposits thus providing sufficient liquidity in a fund that can be used as a short-term investment vehicle. The fund invests in all forms of interest-bearing money instruments where the capital is at low risk – normally in the UK.
North American	The North American Fund is exposed to market risk and to currency risk principally that of the dollar against sterling. The fund will concentrate the core of the portfolio on large companies whilst maintaining a reasonable presence in medium and small-sized companies with above-average potential for growth. The investment objective of this fund is to achieve capital growth in the long term by investing mainly in North American companies.
Pelican (UK Equity)	The Pelican Fund is a fund for UK equity investments. The investment aims to concentrate the core of the portfolio on large companies with above-average growth potential in income whilst maintaining a reasonable presence in medium and small-sized companies with above-average potential for growth. The investment objective of this fund is to achieve long-term capital growth by investing mainly in UK companies.
Property	The Property Fund is highly specialised, i.e. low diversification, and will be very dependent on the performance of this sector as a whole. You should note that the value of property assets is generally a matter of a valuer's opinion rather than fact. What is more, the company reserves the right to defer the cancellation of units and to postpone the date on which the bid prices are calculated. This is because the underlying assets may not always be readily available. The maximum period of deferment for the Property Fund is six months. Particular attention is given to the location of properties. In addition, there may be investment in stocks and shares of property companies from time to time or in development situations. This fund invests in a carefully selected portfolio of properties from the office, shop, factory and warehouse sectors of the market in the UK, let on long leases to quality tenants with regular rent reviews.
Smaller Companies	The Smaller Companies Fund will concentrate the core of the portfolio on smaller companies with above-average potential for growth. The objective of the fund is to achieve long-term capital growth through investing mainly in smaller companies, principally in the UK.
Special situations	The Special Situations Fund will select and actively manage a portfolio of large, medium and small-sized companies with above average potential for capital growth. Advantage will be taken of opportunities offered by management pressures, recovery situations and market anomalies. The objective of the fund is to achieve capital growth by active investment in UK companies with above average potential for growth.
UK FTSE All Share Index-Tracking	The UK All-Share Index-Tracking Fund benefits from the significant diversification of investing in a representative selection of the stocks comprising the FTSE All-Share Index. Historically, the FTSE All-Share Index has shown positive growth over time, however, it must be appreciated that a tracker fund will track an index down as well as up and will, therefore, directly reflect the volatility of the market. The portfolio of this fund will partially replicate the FTSE All-Share Index. Index futures may be used in accordance with the Financial Services (Open-Ended Investment Companies) regulations 1997 rules regarding efficient portfolio management. The investment objective of this fund is to match as closely as possible, subject to the effect of charges, the capital performance and net income yield of the FTSE All-Share Index.
UK FTSE 100 Index-Tracking	The UK FTSE 100 Index-Tracking Fund benefits from the diversification of investing in 100 stocks compromising the FTSE 100 index. It must be appreciated however, that a tracking fund will track an index down as well as up, therefore, directly reflect the volatility of the market. The investment objective of this fund is to aim to match as closely as possible, subject to the effect of charges, the capital performance and net income yield of the FTSE 100 Index. The portfolio of this fund will typically replicate the FTSE 100 Index. Index futures may be used in accordance with the Financial Services (Open-Ended Investment Companies) regulations 1997 rules regarding Efficient Portfolio Management.
Guaranteed Equity	The Equitable Guaranteed Equity Fund guarantees to return the original investment at the end of a one year period and pay a fixed percentage, determined in advance, of any rise in the FTSE 100 Index during that period. This fund invests in a mixture of fixed-interest deposits and financial options. It consists of four sub-funds, each of which operates on an annual basis. The bid price of each sub-fund on any annual date will be the same as one year earlier, increased by a proportion of the rise, if any, in the FTSE 100 Index. The proportion to be allotted of any rise in the FTSE 100 Index depends on the return available on one year fixed-interest deposits and the price of options at the start of the sub-fund year. The fund aims to provide a guaranteed investment which will return a predetermined percentage of any rise in the FTSE 100 Index.
With-Profits	Future returns will reflect the Society's cautious investment stance on with-profits business. The proportion of the fund invested in a fixed-income portfolio of government and corporate bonds was 76% at 31 December 2006. Looking ahead, the investment returns from the Fund are likely to be more modest but also less volatile than in the past, given the high weighting of fixed-income investments and the much reduced exposure to equities.