traded life policies fund
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Traded Life Policies Fund
The Traded Life Policies Fund is a specialist investment fund that enables investors to achieve long term capital appreciation through investment in a portfolio of Traded Life Policies ("TLPs"). TLPs or life settlements are US-issued life insurance policies that have been sold before the maturity date to enable the original owner to enjoy some of the benefits during their own lifetime. Buyers of such TLPs become the beneficiary and continue paying premiums until the TLP matures.

MPL's Traded Life Policies Fund applies a valuation methodology that gradually unwinds the difference between the purchase price and maturity value (less premiums and operational expenses) with the objective of delivering smooth, predictable investment returns.

traded life policies fundThis can only be achieved with significant actuarial analysis. It is important to note TLPs are not without risk because whilst it is known on day one how much money the policy will pay out, it is not known exactly when each TLP will mature and how many premiums will need to be paid beforehand. Therefore to buy just one or just a few TLPs would be a speculative exercise that would pay out huge dividends if the TLPs matured quickly, but the return could be significantly lower if a longer period of time were to elapse before the TLP matures. Furthermore, MPL's Traded Life Policies Fund holds a large number of TLPs, issued by a broad number of counterparties to mitigate mortality and credit risk.

TLPs are a complex asset class to manage and MPL has an experience investment management team that have been actively managing TLP funds for over ten years. The TLPs in the Traded Life Policies Fund are valued on a monthly basis by use 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 does not correlate with other core asset classes such as equities, bonds and property, meaning that the asset class is particularly attractive to those investors' wishing to increase diversification.

It is the reason why MPL is now working with a growing number of institutions and distributors around the world, including some household names that put investment strength at the top of their requirements. To meet this demand the Traded Life Policies Fund is available in share classes denominated in a variety of currencies: Sterling; US Dollar; Euro; Swiss Franc; Japanese Yen; and Swedish Krona. MPL then manages the currency exposure by using traditional currency hedging techniques with the objective of delivering smooth predictable investment returns in the base currency of the share class.

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