Assured Fund, the US senior citizen traded life policies product managed by Policy Selection Ltd (PSL) and currently being marketed to UK IFAs, has
Assured Fund, the US senior citizen traded life policies product managed by Policy Selection Ltd (PSL) and currently being marketed to UK IFAs, has seen exceptional inflows of investment capital into its fund this year.
So far in 2008 (to 1 August) the fund has taken GBP 71.87m (USD 132mUSD), signalling extensive interest from investors at a time when rival asset classes such as equities are being shunned.
In the same period last year (2007), the fund took GBP 68.6m (USD 126mUSD). According to fund manager Mark Hindle, August is likely to see a further GBP 13.6m (USD 25mUSD) flowing into the fund – significantly up on August 2007.
“We are having an exceptional year at a time when other asset classes are clearly struggling,” says Hindle. “The fact that investors are enjoying returns of around 10 – 11 per cent, and are able to access the fund from just GBP10,000, is very attractive to smaller investors,” he added.
The fund, which is enjoying extensive take up by UK IFAs, now holds 252 polices compared to 169 in August 2007. The average face value of a policy is GBP 1.581 m (USD 2.9m) and the fund size is GBP 214.87m (USD 394m).
The dramatic growth in Assured – one of the biggest open ended investment funds of its type – reflects the rising volumes of people living well into their 80s in the US.
“The US demographic is such that the pre-baby boomer generation is now coming to an age when it makes sense for them to trade their life policies on the market,” says Hindle. “The fund is immensely attractive to investors looking for growth in their portfolios in today’s market conditions.”
Assured Fund says it invests in US life assurance policies being sold on the second-hand traded market by elderly US citizens – the typical age of policy holders is between 75 and 85. Reflecting similar products in the UK, the US-based policies carry a guaranteed death benefit and the sum assured. When the policyholder dies, the full sum assured is realised, with the Assured Fund then receiving the proceeds.
“UK IFAs can steer their clients into the B share class with a minimum of just GBP10,000. This compares to the GBP35,000 minimum for the institutional investment class,” says Hindle.
Hindle predicts that the market for the remainder of 2008 will grow at an exponential rate as retail investors look beyond ordinary stocks and share to put growth on their portfolios.
