Guide To Investment-linked Funds

Each of our investment-linked assurance policies offers an exceptionally wide range of investment-linked funds for investors to choose from, as well as access to some of the most prestigious names in international investment.

What Is An Investment-linked Fund?

Friends Provident International Limited (FPIL)operates a range of investment-linked funds. The concept is simple: agreements have been set up with investment houses worldwide allowing us to link to specially selected underlying funds chosen on the basis of performance and investment expertise. FPIL has set up its own investment-linked fund which invests solely in such underlying fund, apart from a proportionately small amount which may be held as a cash balance.

These investment-linked funds are intended for medium to long-term investment and can only be accessed using FPIL's investment-linked assurance policies. These policies are also intended for medium to long-term investment and are not therefore designed for early surrender. Substantial surrender charges/penalties will be applied in the event of early surrender. There may also be restrictions on the amount of withdrawals available from a policy and you should refer to the relevant Principal Brochure for more information. A withdrawal charge of up to 7.5% of the bid value of the amount of withdrawal may be applied.

Our policyholders invest their premiums into FPIL's investment-linked assurance policies. According to policyholders' chosen investment-linked funds, FPIL invests these premiums collectively in the underlying funds. Units are notionally allocated to your policy solely for the purpose of calculating the benefits which we will pay to you. FPIL is the absolute legal and beneficial owner of all the assets which relate to each investment-linked fund. Policyholders have no rights or entitlements to these underlying assets. The price of the FPIL investment-linked fund will be different from the underlying fund, but should move broadly in line with it.

Please note that there are fees for investment-linked assurance policy and investment-linked funds that would in turn affect the return on your policy, which may be lower than the return on the underlying funds. Please refer to the corresponding prospectuses of the underlying funds, which will be made available by FPIL's Hong Kong office. These prospectuses will help you to understand the underlying funds, their investment objectives and strategies, the risks that may affect your investment, whether your financial goals are matched, etc. Please do not rely on these documents alone. We recommend that you discuss fully both the suitability of the investment-linked assurance policies and the specific risks associated with your investments within these policies with your Financial Adviser before making any investment decisions.

Important Information

Investment involves risks. Investment-linked fund prices may go up and down depending upon the underlying investment performance or, where investments held within an investment-linked fund are not denominated in the currency of that investment-linked fund, simply because of movements in currency exchange rates. Past performance should not be viewed as an indication of future performance. Full details of the underlying funds are available from the relevant fund house, which you should contact for more information.

You should refer to the relevant Principal Brochure (and Technical Guide) for details of the plans, including fees and charges. For the exact terms and conditions, please refer to the relevant policy conditions.