Investment maturity period. If their child needs

Investment
Linked Products (ILP)

ILPs
consist of both life insurance and investment. ILPs usually do not have
guaranteed cash values as it depends on the sub-fund’s performance. ILPs have a
low to high risk, depending on the risk of the sub-funds.

 

Endowment

Endowment
are often used to build up savings over a fixed policy term. Premiums will be
used to pay for insurance protection while the rest are invested and are
subjected to investment risk. Endowment policy usually mature after a fixed period,
usually 10, 15, 20, 25 or 30 years.

 

Unit
Trust

Unit trust
is a fund that pools together investors’ money whereby they will invest in a portfolio
of assets. Unit trust have a low to high risk, depending on which type they
choose.

 

Evaluation

We
recommend unit trust to Ann. This is because she needs to prepare a sum for her
child’s marriage and help in the initial down payment for purchase of
house. Both ILP and Endowment are insurance with a fixed maturity period. If
their child needs the money before the maturity period, the client will not be
able to cash out their insurance policy. Hence, unit trust, which can be easily
liquidated within a short period of time, is recommended. Furthermore, they
already have several existing insurance policies, hence, their risks are
already sufficiently covered.

 

Unit Trust

AIA Regional Fixed Income Fund. This fund provides stable income with capital preservation
by investing primarily in high credit quality fixed income instruments. This
fund does not pay-out dividends but carries lower risk.

 

NTUC Income Asian Income
Fund. This
fund aims to provide income and capital growth over the medium to long term.
This fund invests in Asian equities such as real estate, and Asian fixed income
securities. The fund carries high risk.

 

 

Great Eastern GreatLink
Global Bond.
This fund minimize volatility relative to the benchmark but tires to achieve
excess return relative to the index. It is broadly diversified as it primarily invests
in a portfolio of investment grade bonds. It has a low to medium risk.

 

Recommendation

Great Eastern GreatLink
Global Bond.
Ann is already 50 years old, she cannot afford to take high risk investment.
Furthermore, the sum of money needed for Ann to help her son is not small as the
cost of both a flat and marriage is quite expansive. With low risk investment,
she might not be able to earn much. Hence, we recommend a unit trust that has a
low to medium risk.