Exploiting the Investment Lag

With-profits policies provide smoothed growth by using reserves built up in good years to support returns in leaner years. Smoothing creates an investment lag and so the strong recovery in underlying funds in recent years has only just started to be passed on to policyholders through increased bonus rates.  The table below shows this lag for the main with-profit funds.

This means that now is an ideal time to invest in with-profits in order to maximise capital growth.

Traditional with-profits policies are no longer available as new investments so the only way to tap into this market is through Traded Endowment Policies (TEPs).

The Endowment Growth Fund (EGF) only invests in TEPs from the strongest with-profits funds, offering an effective way to access the benefits of with-profits.

The Investment Lag in Action

The table shows reserves being rebuilt whilst bonus rate increases have only just started.

Click to find out about the Hidden Value in With Profits >>

The value of shares may fall or rise each month, this means that your capital is at risk when investing in EGF. This investment should be regarded as medium to long term in nature. If you withdraw from this investment in the first 5 years, exit penalties may be applied. It is only suitable for professional investors who understand the risks involved and investment should not be made prior to reading the prospectus. If in doubt seek expert advice. Nothing contained within this document constitutes investment advice or an offer to subscribe. Shares in the Endowment Growth Fund (EGF) are single priced with no bid/offer spread. Class A shares are offered in GBP and class B shares are offered in GBP, USD or EUR. Returns may be affected by fluctuations in currency exchange rates.