Technical Savings and Investments Information

STRUCTURES OF INVESTMENT-LINKED FUNDS

Similar to the majority of investment funds, investment-linked funds are generally structured as follows:

1. Accumulation Units: all profits generated from the investments are “accumulated” and reinvested back into the original fund; thus enhancing the price of the units. The number of units held will remain the same.
2. Distribution Units: all profits generated from the investments are “distributed” as bonus units to the investors; thus increasing the number of units held. The price of the units will remain the same.

As the policyholder will be entitled to all the profits generated, or all the losses incurred, from the investments, he/she will therefore benefit, or suffer, either from the higher, or lower, unit price (accumulation units) or the increased, or decreased, number of units (distribution units).