Insurance company Pru Life UK launched on Thursday its US dollar-denominated investment-linked life insurance product named PruLink Cash Flow Fund (PCFF) which offers up to a 4-percent quarterly payout to provide a cash flow for investors looking for a regular payout on their investments instead of waiting for the maturity period.
The PCFF seeks to provide investors with regular payouts by investing in a diversified portfolio of assets managed by Singapore-based Eastspring Investments Ltd., another subsidiary of the United Kingdom-based Prudential Plc.
Pru Life UK President and CEO Antonio Manuel de Rosas said the fund will invest in diversified assets, mainly in the subfunds of Eastspring Investments, namely, a US High Yield Bond Fund and the Asian Bond Fund.
The fund may also invest in other subfunds of Eastspring Investments, such as the World Value Equity Fund, the North American Equity Fund and the Asian Equity Income Fund.
De Rosas said the advantage in investing in investment-linked life insurance policies is the diversification that it offers to investors.
When an investor puts money in exchange for corporate bonds, he effectively stakes his money to the performance of the corporation that might default on its payments in the future.
But in the case of investments in the so-called investment-linked life insurance policies, the premiums paid by the investors are invested in diversified assets as an additional protection for the investor. This is aside from the life insurance cover offered by the investment-linked life insurance policy.
“We are pleased to introduce the PCFF, an investment option that the Philippine market has been looking forward to for quite some time. With its dynamic allocation strategy, the PCFF provides access to diverse credit and equities markets that provide a potentially less risky portfolio compared to a 100-percent equity fund in the current uncertain macro climate. Also, because of its diversified investment allocation, the PCFF potentially offers a better risk-reward profile compared to other funds, which focus on a single market or asset class,” de Rosas said.
The asset allocation of the PCFF will be as follows: US High Yield Bond Fund (49.6 percent); Asian Bond Fund (40 percent); equities (8.4 percent), and; cash and other net assets (2 percent).
De Rosas added that another advantage that PCFF offers is that an investor may pull out his investment at any time because the investment is not tied up for the duration of a particular maturity period, while at the same time collecting on the regular quarterly payout from his investment in PCFF.
The PCFF is initially available to those availing of the US-dollar denominated PruMillionaire policy, which is Pru Life UK’s elite single-pay investment-linked product. It is also available for switching for existing PruMillionaire Dollar policies, which have a minimum single-pay premium/investment of P1 million, or $20,000.
De Rosas said the PCFF would subsequently be available for investors with smaller capital in the next few months.
David Cagahastian