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Research among IFAs shows increase in favourability towards traded life policies PDF Print E-mail
News - Funds
Wednesday, 07 October 2009 16:19

New research from Managing Partners Limited (MPL), the boutique fund manager, reveals that familiarity with Traded Life Policies (TLPs) has steadily increased among IFAs over the last two years. The research shows that 78% of IFAs are now familiar with them as investment products. This is compared to 74% familiar with them in 2008 and 70% in 2007.


TLPs used to be in strong competition to ‘with-profit’ based investments but according to the research, an increasing number of IFAs (78%) would not proactively recommend clients to invest in with-profits and would rather recommend TLPs.

Jeremy Leach, Managing Director of MPL, commented: “We have seen the favourability towards TLPs increase over the last two years, as with-profit investments fail to deliver positive returns for investors. TLPs offer steady, predictable returns that are uncorrelated with other asset classes, making them particularly attractive in periods of volatility.”

TLPs are US-issued whole of life policies sold before their maturity date to allow the original owners to enjoy some of the benefits during their own lifetimes. By building diversified portfolios of them and carrying out the right actuarial analysis, fund managers can use them to deliver steady, incremental returns that are uncorrelated to other financial asset classes.

Nigel Newlyn, Director at Argent Personal Finance Managers, a City-based IFA, describes TLPs as an “anchor” asset class that provides stability to his clients’ portfolios.  He said: “It serves our purpose to have a percentage of portfolios invested in assets which are solid and chug along no matter what markets do.”

 

For retail investors, MPL offers a Sterling Growth share class in its Traded Policies Fund. The fund is a fully regulated Cayman Islands mutual fund that can be included in personal portfolio bonds, wraps and SIPPs. It was an outstanding performer in 2008. The GBP Growth share class in the fund returned 10.47% net of all charges in the 12 months to 1 January 2009. Over the 12 months to 1 September 2009, the GBP Growth share class delivered 9.18%.

 

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