Traded Policies Fund achieves positive return every quarter in its first three years.

Traded Policies Limited, an open-ended investment company managed by Managing Partners Limited (MPL), the fund management group, has significantly outperformed its benchmark and cash in the first three years since its launch.

The institutional US dollar share class in the fund returned 28.35% in the three years to 1 July, 2007, significantly outperforming its benchmark, the 10-Year US Government Bond Index, which returned 8.54% over the period, and the Fed Funds Effective Rate, which returned 12.768%.* The $60m fund’s return represents an annualised return of 8.78%, net of all charges.

The fund did not suffer a single negative return in any quarter during that period, demonstrating the potential of traded life policies (TLPs), in which the fund invests, to deliver consistent, incremental growth.

TLPs are United States-issued life assurance policies sold before the maturity date to allow the original owner to enjoy some of the benefits during their lifetime.  Funds that invest in TLPs are low risk because the investor has a good understanding of how much profit will be made from each policy in the fund.

The fund has experienced an inflow of assets this year, attracting $13m in Q2 alone. This can be attributed to rising interest rates pushing down yields on the bond market and tempting UK and European investors to look for higher, steadier returns elsewhere.

Jeremy Leach, Managing Director of MPL, commented: “The TLP market is rapidly gaining popularity among pension funds. They like the steady returns that TLPs offer, enabling a closer match with future liabilities to be achieved. The TLP market has seen such huge growth - from $50m in 1990 to $10bn in 2006 – that they should be recognised as an asset class in their own right. TLPs make a great low risk alternative for investors looking for high growth potential.”

The Traded Policies Limited fund is available in sterling, euros and US dollars and targets an annual return of 9% per annum, net of all charges. Institutional share classes in euro and sterling were launched 31 July 2005. A retail share class was launched in March this year, allowing investments from wrap providers and insurance companies.

Top five holdings in the fund include TLPs from John Hancock Life Insurance Company (10%), Lincoln National Life (10%), American General Life Insurance Company (7%), Minnesota Mutual Life Insurance Company (6%) and Security Life of Denver Insurance Company (5%).

This entry was posted on Friday, July 27th, 2007 at 12:09 pm and is filed under Managing Partners News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.