Fund Closure - SPILA Bonus Growth Range of Funds
On the 1st December 2015, the SPILA range of Bonus Growth funds will close. Policyholders with existing holdings will be automatically switched into an alternative SPI Fund.
Impacts onclosed products linked to
Why we are closing the funds?
The Bonus Growth funds were designed in the early 1990’s with the objective of providing a sliding scale investment between equity and guaranteed growth investments (UK or US Government issued treasury gilts) over time, and locking in equity growth by switching more of the fund into gilts as it progresses towards its guarantee year. Over the years the equity markets have become increasingly volatile, interest rates have fallen significantly and at the same time the Bonus Growth funds have declined in size.
With this in mind is it becoming increasingly limiting for the investment managers to manage the Bonus Growth funds according to their intended investment objectives. The RL360˚ Investment Committee have considered this situation and have determined that it is in the best interest of investors to close these funds, and instead allow policyholders the opportunity to invest in funds that have far broader investment potential.
There is a comprehensive range of SPI internal funds that policyholders can access, including global equity, single country equity, managed, fixed interest and cash funds, and they can choose to invest in any one or more of these funds should they wish to diversify their portfolio.
What happens now?
On 1st December 2015 the Bonus Growth Funds will close. At this time, any policyholder still invested in Bonus Growth funds will have their holding automatically switched into either the SPI Sterling Balanced Managed Fund, or the SPI US Dollar Balanced Managed fund depending on the denomination of the Bonus Growth fund they currently hold. This switch will be conducted free of charge on their behalf. Any regular premiums they currently pay into the Bonus Growth funds will also be redirected. The Annual Management Charge of 1% is the same across the Bonus Growth and the SPI Managed Funds.
Objective of the SPI Balanced Managed Funds
The Balanced Managed funds invest in a combination of bond and global equity investments with the objective of achieving medium to long-term capital growth. Due to the greater focus on equity investment, the Balanced Managed funds are slightly higher risk than their Cautious counterpart (which are also available), but the fund spreads risk efficiently through a well-diversified portfolio of assets, and we feel the Balanced mandates are the most closely matched option to Bonus Growth. There are also Sterling and US Dollar Adventurous Managed funds available for the more speculative investor.
On 1st December 2015, when we close the Bonus Growth funds, we will automatically apply a 1% bonus to the fund value on transfer to the Balanced Managed Funds as a thank you to policyholders for continuing to invest with RL360˚.
Alternative fund choice
If they are not happy with their holding being transferred into the Balanced Managed fund then policyholders can choose to switch into any other fund from the SPI Internal Funds range, free of charge.
Information about the SPI Internal Funds range can be found in the ‘Downloads’ section of our website at: www.rl360.com/bonusgrowth
Here you will find a product specific Investment Guide detailing the current menu of funds available, a Fund Performance Bulletin and a Switch Form which policyholders can complete with their new fund choice and return to us for processing. Policyholders should also remember to redirect any regular premiums if they are currently paying premiums into the Bonus Growth Funds.
Alternatively, registered Online Service Centre users can use the fund switching facility to conduct switches online fast and efficiently, and make changes to the direction of regular premium payments.
We have issued letters to policyholders affected by these changes a sample of which can be viewed opposite. Servicing financial advisers attached to these policies will receive a copy of the letter for their information.