The term “Mirror Fund” is often used by offshore life companies when promoting or discussing offshore investment opportunities. In essence, a mirror fund invests in other funds – the underlying funds- and will invest exclusively in the underlying fund, managed by fund management companies external to the Offshore Life Company. The mirror fund may also hold a small amount of cash, in addition to the investment in the underlying fund. As such, the unit price of the mirror fund will differ from the price of the underlying fund. However, the performance of the mirror fund price will rise and fall, broadly in line with the performance of the underlying fund.
When making an investment offshore do I pay any premiums or fees to ProFin?
As per our standard “Terms of Business” agreement ProFin act as an Independent Financial Advisor on your behalf and we will be paid a fee by the Offshore Product Provider for placing this business. Most importantly, our internal compliance rules do not allow us to handle clients money, therefore as the contractual relationship is always between you and the Offshore Product Provider all lump sum or regular premium payments must be made directly from your personal/ company bank account to the relevant provider.
How safe are my investments?
All investments carry two main elements of risk the first being Institutional/Territorial risk and the second investment performance risk.
Firstly, when investing offshore it is important that you choose a company which is amongst one of the world’s leading international life assurance companies. It is for this reason that ProFin have decided to work with companies such as Friends Provident International, Generali International and Royal Skandia International. For further details on the size and credibility of these companies go to our “Resource Centre” and click on the underlying links.
Investments via these companies also provide the added benefit of Policyholder Protection. For more details regarding this scheme click here
Secondly, underlying investment performance will depend on your overall appetite for risk, term of your investment and the asset allocation and diversification attributed to the portfolio. It is important that all of these issues are discussed in detail with your ProFin advisor and reviewed on a regular basis.
What is a “Hedge” Fund
A hedge fund is an investment structure initially pioneered in the United States in the late 1940s / early 1950’s for use by wealthy private individuals. Over the past 50+ years, hedge funds have evolved to now be used by investors globally as by a wide range of private and public financial institutions. Today there are between 12 and 20 different hedge fund strategies and in terms of their structure, hedge funds are allowed to use leveraged structures that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage and derivatives. Hedge funds are exempt from many of the rules and regulations governing other mutual funds, which allow them to accomplish aggressive investing goals. Most hedge funds set extremely high minimum investment amounts, ranging anywhere from $1 million to over $5 million and come with restrictive redemption conditions. As with traditional mutual funds, investors in hedge funds pay an annual management fee of which will be disclosed in the fund literature. Hedge fund managers generally also collect a percentage of the profits (usually 20%). Hedge funds are still generally described in the media as being high-risk, high-return investment products, some are but the majority of them do not fall into this category.
A wide range of investors including Pension Funds, insurance funds, banks and private investors are drawn to these products because they are considered to be a good means of obtaining positive returns that are not correlated to other traditional parts of their portfolios.
What is the definition of a recession?
There are different degrees of a recession. However, technically speaking, an economy would slide into recession when it experiences two successive quarters of what is known as “negative growth”.
For this to happen, the total amount of goods and services produced – known as gross domestic product (GDP) – would have to contract on a quarter by quarter basis for a total period of six months. An economy could contract in two consecutive quarters but then recover and actually see growth for the year as a whole. Were that to happen, most commentators would label it a mild recession.
However, there is also the danger of a full-blown or severe recession where there is an absolute decline in economic growth on a year-by-year basis.