Fund Closures - RL360 Euro Capital Protected Fund Range
On 11 December 2015 we will formally close the Euro Capital Protected Funds.
Following a review, in March 2014 we closed a number of our Euro denominated Capital Protected Funds. However following a prolonged number of years of poor investment growth, coupled with low interest rates, we have concluded that it is now necessary to close the remaining Euro Capital Protected Funds.
Why does RL360 need to close the funds?
The funds have gradually been decreasing in size for some time and this is limiting their potential for growth.
This combined with an almost 0% Euro interest rate and the increasing cost of purchasing options, which provide the growth potential for the Europe Index Fund, has meant it is now unviable to continue running the remaining Euro Capital Protected Funds for the benefit of policyholders.
We believe it is no longer practical to achieve the original objectives of the Euro Capital Protected Fund range.
What does this mean for policyholders?
At the next quarterly dealing date, which is 11 December 2015, we will switch policyholders into an alternative cash deposit fund simply called the EUR Cash Fund. This fund is daily traded and priced, with no quarterly lock-in, offering policyholders daily access to the value within their policy.
This switch will be free and the annual management charge (AMC) for the EUR Cash Fund will be 1.00%, reduced from the 1.25% previously applied to the Capital Protected Funds.
The EUR Cash Fund invests 100% in Euro denominated cash deposits and the growth achieved is dependent on the interest rates we receive. Due to the low interest rates currently available for Euro deposits we cannot guarantee the fund will achieve any growth.
Surrender option
Should policyholders wish to surrender their policy, they can do so free of any surrender penalties.
Policyholders have been written to. Servicing advisers will be sent a copy of the letter for their information. A sample of the policyholder letter issued can be viewed opposite.