Traded Life Policy Fund index shows sector growth
The newly launched Traded Life Policy Fund index reported a 108.5% growth in the collective size of the funds it monitors in the 12 months to 1 November 2007.
The combined assets under management rose to $405.2m (€277m) from $194.35m, or around $17.57m a month.
The index tracks the size of five leading funds - the Traded Policies fund, the Select High Security fund, the Corinthian Growth fund, the Assured fund $B and the Aurora fund - specialising in traded life policies (TLPs) on a quarterly basis.
TLPs are US-issued life assurance policies sold before the maturity date at a discount from their maturity value to allow the original owner to enjoy some of the benefits during their lifetime. The TLP market has seen huge growth, to well over $20bn from $50m in 1990.
During the year to 1 November 2007, fund manager and developer of the index Managing Partners Ltd (MPL) saw a 190.18% increase in the amount of money invested in its traded life policy funds. It estimates that 75% of this is from institutional and the rest from retail investors.
MPL claims that while TLPs carry the uncertainty of when the assured will die, a TLP fund with the right diversification and actuarial analysis can deliver steady, predictable returns.