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Impact Investing

IPE special report May 2018

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Traded Life Policy Fund index shows sector growth

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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.

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