Traded Policies Fund

Traded Policies Fund is a specialist investment fund that was incorporated in 2004 to offer institutional investors a unique opportunity to participate the in returns achievable from investing in a portfolio of Traded Life Policies (TLPs) issued by leading United States insurance companies.

Policies that are acquired by the fund are purchased at a discount from their maturity value. In the majority of cases, the maturity value is fixed at the outset, which means that these assets are guaranteed to grow in price. This is particularly attractive to investors looking to remove some of the risk associated with their portfolios.

The TLPs in the fund are valued on a monthly basis by using of an actuarial model that aims to equitably unwind the growth of the policies, making adjustments for claims experience and future premium liabilities. The result is an extremely smooth and predictable growth trend that can be seen from the fund’s past investment performance.

In recent years, institutional investors have placed a greater focus on Liability Driven Investment Strategies, where they try to link the potential returns of assets to a fund’s liability. There is no greater way of achieving this objective than selecting a fund that delivers extremely smooth and reliable levels of investment return.

The share classes of Traded Policies Fund are non-correlated and offer an alternative investment dynamic that combines high growth potential with greatly reduced risk, making this an extremely attractive investment vehicle in today’s volatile market place.

The Fund invests predominantly in Traded Life Policies or TLPs (referred to as 'Traded Endowments' in the UK), which are United States-issued life assurance policies that have been sold prior to their maturity dates to release capital to the policy seller. It is because of this unique investment strategy that the fund carries a much lower level of investment risk that one would ordinarily associate which with such a high potential for growth.

However, it is important to note that TLPs are not without risk because whilst we know how much money we are going to make on day one, we do not know exactly when each policy will matures and we do not know how many premiums will need to be paid before the policy pays out. Therefore, to buy just one, or possibly a small number of TLPs would be a speculative exercise, which could pay huge dividends if the policies pay out quite quickly, whilst the return could be quite low if a longer period of time were to elapse before the policies mature.

The investment manger has addressed all of these risk factors to dramatically reduce them by smart investment management to create very smooth, predictable returns. This is achieved by only acquiring policies where we are able to more accurately assess life expectancy. Typically we would focus on elderly lives where a basis for life expectancy can be formed from Population Mortality Tables and then adjusted, having given specific consideration an individual’s state of health. By building a large portfolio of policies, the risk of inaccurate life expectancy is diminished greatly as it is based on the trend of the portfolio as a whole rather than on the claims experience of one just policy.

Key Features 

• Available in Sterling, Euros and US Dollars
• Aims to provide steady capital growth
• 9% annual growth target net of all charges
• Fully Regulated Mutual Fund
• FSA Regulated Investment Advisor
• Low annual management fee – 0.3% per annum
• Specifically structured for institutional investors
• Not stock market related
• Financial Times Listing
• Prices available on FT.com and Bloomberg
• Can be included in PPBs, SiPPs and Wraps

E-mail us now to get prospectus and fact sheet for this fund