The Endowment Growth Fund, run by traded endowment policy market makers Policy Plus, is favouring li...
The Endowment Growth Fund, run by traded endowment policy market makers Policy Plus, is favouring life offices including Clerical Medical, Standard Life and Norwich Union in its portfolio.
The fund invests in the with profits endowments of various life companies and has around 19% in policies issued by Clerical Medical and some 16% exposure to Standard Life. It also has around 12% in Norwich Union endowments and approximately 15% in endowments based on the Royal Insurance with profits fund, now part of the Royal & SunAlliance group.
Legal & General endowments make up just over 7% of the portfolio, with other life offices represented in the fund including Scottish Life, Scottish Amicable, Friends Provident, Scottish Equitable as well as policies based on Sun Alliance's with profits fund, now part of the Royal & SunAlliance group.
David Carrington, sales and marketing director of Policy Plus, said: "In terms of the strong performing with-profits offices, something like 20% of all endowments are Standard Life endowments. We have also gone overweight Clerical Medical as its bonus rates year on year do outperform the market. It has got used to the new environment it is operating in now in terms of its takeover by Halifax and the company is much stronger for it. It is focused on which market it is going for, which is the broker market.
"When selecting life offices, investment performance is not the be all and end all, we are looking for factors such as the financial strength of the with profits fund.
A with-profits fund should be able to ride through the bad years and withstand long periods of poor performance. We are also looking for predictability of bonus rates."
The fund is targeted at professional investors and institutions and the minimum subscription is £100,000. The fund is listed in Dublin and quoted on the Irish Stock Exchange. The annual management charge on the fund is 1% and exit penalties are calculated on a sliding scale during the first five years of investment. The exit penalties range from 10% on withdrawals in the first two years to 4% if withdrawals are made in year five. The Endowment Growth fund is run by Graham Cottingham, technical director of PolicyPlus who works on selecting investments with independent actuary Charles Cannon.
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