22 October 2008
Investors in with-profit funds face the prospect of lower
pay-outs and higher exit charges amid the global financial turmoil.
With-profit funds attempt to smooth volatility by holding back some
returns in good years to top up policies when the performance is
poor.
With-profit funds have been hit by the fall in equity markets,
as well as poor returns from corporate bonds and commercial
property. Industry experts predict that with-profits policyholders
could be facing losses of between 15 per cent and 20 per cent as a
result of market movements this year.
