AM Corporation has made its first foray into international markets with the launch of a fund dealing in international traded policies.
The new fund will source life insurance policies in the UK with the help of its domestic wholesaler of policies, PolicyLink, who will act as broker in the UK. AM will market the product through its independent intermediary distribution channel in Australia as both a hedged and unhedged fund.
AM pioneered traded policies as an asset class about three years ago and the group now manages more than $500 million in two domestic funds, including the $490 million Series II fund launched just over two years ago. Traded policies funds have life insurance policies as the underlying asset. They have been supported by advisers as an alternative investment category to fixed interest and one which has offered superior returns in recent years.
AM chairman David Smith describes the move into international traded policies as “an evolutionary step”.
“It is diversifying the number of options opened in the traded policies sector,” he says.
Smith admits the group also looked beyond our shores because the group was finding difficulties sourcing enough policies to meet demand in Australia.
“Supply of product is beginning to increase but liquidity levels were beginning to become too high,” he says.
The group recently launched the Series III fund which reached its $30 million limit inside three months.
