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Managers turn to EEA life settlements

EEA Fund Management says multi-managers such as Lawrence House are turning to alternative assets classes such as the EEA life settlements fund to diversify their portfolios as market volatility continues.

EEA’s life settlements fund has achieved 26 consecutive months of positive returns. Over the last six months, the fund has outperformed cash, UK equities and bonds by returning 4.88 per cent.

Life settlements are the sale of US life insurance policies to a third party, where the insured has an impaired life expectancy.

The EEA fund pays all future premiums during the insured’s lifetime and collects the full value of the policy at maturity. This makes the fund uncorrelated to other asset classes when markets are volatile.

Lawrence House fund manager Alan Stokes says this lack of correlation is one of the main attractions of the EEA fund. He finds it particularly useful in reducing volatility within a portfolio and in generating a high yield without the high levels of capital erosion on some products.

EEA Fund Management marketing director Peter Winders says: “We are seeing a considerable increase in interest from IFAs and also from multi-managers who realise that we have continued to deliver in the face of adversity. They recognise the value of uncorrelated assets in diversifying risk out of portfolios.”

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