Fees and Costs Associated with Investments

The fees associated with the investment portfolios are laid out below for your reference.

  • The investment fee is 0.28% p.a. excluding performance fees*.

  • Management fees of 0.26% p.a. are deducted from the gross bonuses declared each month by the insurance company (MMI Life) to cover the cost of investment management.
  • In addition, a capital charge of 1.25% p.a.** is deducted from the value of the underlying assets before bonuses are declared, to cover the cost of the guaranteed provided by MMI as well as the cost of product administration.

  • The assets underlying Portfolio C are invested with a number of different fund managers, so the total investment management fee is a weighted average of the amounts paid to each manager and will vary from time to time as the mix of managers changes.
  • In a few cases the manager may at times receive performance fees for good investment performance, which will also cause the total fees to vary over time.
  • The base fees are currently estimated to be some 0.47% p.a. and it is likely that the total fees will average some 0.63% p.a. over the longer term if performance fees are also included.

  • This is invested in a multi-manager portfolio, for which there is a fee of 0.85% p.a. for product management and administration, plus fees paid to the underlying investment managers.
  • However, the total, combined fees will not exceed 1.09% p.a.

 * It is very difficult to estimate how performance fees would increase the total fees and charges. As an indication, we can say that, if the Portfolio C managers who are subject to performance fees were to do extremely well relative to the benchmarks (targets) set for them, this might increase the total fees and charges for Portfolio C by around 0.2% p.a. In the case of Portfolio B, the figure would be higher, because a greater proportion of the assets is subject to performance fees.

** Includes the “capital charge” of 0.9% p.a. levied by the insurer in respect of the guarantees provided under the smoothed-bonus policy. These fees and charges have changed from time to time in the past, and may change (up or down) in the future. The UCTRF Board is committed to ensuring that the investment portfolios offer good value for money to UCTRF members.

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