The volatility in the global economy over the past few years has made discretionary investment policies a popular target for conservative investors, insurance and investment trust companies said yesterday.
Thirty-nine discretionary investment policy products were introduced in Taiwan last year, compared with six in 2007, the latest data from life insurance companies showed.
“We have seen sales of discretionary investment policies outperform other products since last year,” Allianz Taiwan Life Insurance Co (安聯人壽) chief executive officer Danny Lam (林順才) told a news conference yesterday.
Allianz Taiwan began offering six discretionary investment policies in the second half of last year, with total premiums already breaking the NT$20 billion (US$637.71 million) mark, Lam said.
Allianz Taiwan is to issue 10 to 15 more policies, with total premiums worth NT$50 billion, by the end of this year, he said.
A discretionary investment policy is a type of investment-linked product where the buying and selling decisions for a client’s account is made by a portfolio manager or investment counselor commissioned by the life insurer issuing the policy.
Allianz Global Investors Taiwan Ltd (德盛安聯證券投資信託) intermediary sales vice president Timmy Chu (朱漢鼎) said more investors are expressing an interest in discretionary investment policies, largely because of the volatility in the global economy since the 2008 financial crisis.
“Many investors look at discretionary investment policies as a tool to pursue moderate and conservative investment strategies, because these kinds of products return a certain percentage of gains back into the holder’s account,” Chu told the Taipei Times.
Given the relatively moderate strategy set by the life insurers, most portfolio managers of discretionary investment policies follow instructions, which means these products keep a steadier pace in gains than others, Chu said.
However, Jordan Chen (陳朝燈), chief investment officer of Schroder Investment Management Taiwan Ltd (施羅德證券投資信託), said that portfolio managers of the nation’s discretionary investment policies may have wider flexibility in picking investment targets in the future, as the market matures and investors gain more trust in professional managers.
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