This Investors Trust Fixed Income Portfolio review will tackle the features, and pros and cons of this investment option.
One thing to note is that investors looking to conserve cash or retirees like fixed income portfolios for their potential to offer a steady stream of income.
Nevertheless, one must be aware that fixed income investments are subject to risks too.
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This includes if you are looking for alternatives or a second opinion.
A bit of background on Investors Trust: The ITA Group, a multinational insurance company, is represented by Investors Trust. Investors Trust offers capital-protected fixed income portfolios and alternative investments in a variety of lump sum products.
Investors Trust offers unit-link investment solutions to provide offshore investors access to international markets. Investors can create customized strategies to meet their financial targets.
Investors Trust Fixed Income Portfolio
If you’re looking for a fixed or variable rate portfolio with attractive potential returns, consider the Investors Trust Fixed Income Portfolio.
15-year Variable Rate
Investors Trust provides a USD fixed income portfolio with a variable rate that lasts for 15 years. Contributions must be at least $2,400 per year to be eligible for the plan, and riders allow for top-ups of the same amount per year if desired.
Based on the SOFR, the interest rate ranges from 3.50% to 6% per year.
Annual, semiannual, quarterly, or monthly premium payments are all acceptable. There is a 100% guarantee on the principal for the whole 15-year investment period.
While the term is in effect, an annual administration charge of 1.125% will be applied. There is no difference between the bid and offer prices, and the first year’s premiums are free. After that, the monthly premiums are $7.
As a loyalty benefit, the plan will credit 7.5% of contributions for years 1–10 and 5% for years 11–15. Remaining contract years are used to determine surrender charges.
Once the second year has passed, you can withdraw some of your money for free, including interest and principal, as long as you keep the minimum surrender value at $2,400.
Withdrawals of funds cause the interest rate to drop to 3.5% per year.
Death benefits equal to 101% of the Account Value are guaranteed and are available to plan participants between the ages of 18 and 70.
3, 5, 7, & 10 Year Fixed Rate
Investors Trust offers USD-denominated 3, 5, 7, and 10-year fixed income portfolios. Investors have the freedom to choose their investment levels, with a minimum contribution of $10,000 and the potential for minimum increases of the same amount through a rider.
Investors have a range of possible returns due to interest rates that fluctuate with term length, from 3.75% for the 3-year term to 4.75% for the 10-year term.
Investors’ initial cash stays intact throughout the investment period thanks to the 100% principal protection offered by these fixed income portfolios.
In addition, there are no administrative charges for the portfolios, making them cost-effective. A monthly policy charge of $7 is levied, ensuring that the fee structure is transparent.
Added peace of mind for investors and their families is provided by a guaranteed death payout equal to 101% of the surrender value, in the terrible event of the beneficiary’s passing.
Investors might be any age from 18 to 85.
Pros and Cons of Investors Trust Fixed Income Portfolio
Fixed Income Benefits
- Secure principal
- Consistent Revenue
- Affordable minimums and surrender charges
- Clear and Competitive Pricing Models
- Features contribution-based loyalty bonuses to incentivize long-term investment.
Risks of Fixed Income Investing
- Investors who need access to their money before the insurance matures may find it difficult to do so if early encashment leads to surrender charges tied to the policy’s term.
- Every year, the portfolio’s interest rate is adjusted, which means that returns could be affected by market conditions.
- There is a negative correlation between interest rates and fixed-income assets.
- You run the danger of seeing the buying power of your fixed income returns gradually eroded over time due to inflation.
- Now interest rates are higher, you can get 6%-8% on A-rated instruments.
The bottom line is that this is a conservative product, with expected return on investment expected to be lower than some of the alternatives.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
