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9-year Par Fund performance of Insurers

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Old 12-07-2015, 05:38 PM   #1
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9-year Par Fund performance of Insurers

As the the Cash Value illustrated in BIs can only be realised only if the underlying Par Fund achieve at least those returns, I set to find out the past performance of the different Par Funds for the more common insurers:



From the above data, it is clear that why Tokio Marine is the only insurer in Singapore to have honoured their bonus projections for the past 66 years.

Remember insurance agents used to tell us all companies are the same.. I beg to differ.
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Old 12-07-2015, 05:39 PM   #2
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dont even bother to invest with them
not as if they can outperform
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Old 12-07-2015, 05:48 PM   #3
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let me guess...raymond, u work for Tokio mArine!
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Old 12-07-2015, 06:47 PM   #4
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dont even bother to invest with them
not as if they can outperform
Then I hope you your portfolio consists of 100% term insurance. My point of showing this findings is directed towards those who plan to buy whole life policies, reason being the cash values in later years. Another great resource of actual policies returns can be found here.

let me guess...raymond, u work for Tokio mArine!
Nope, I'm not in the financial industry. So don't PM me if wish to take up any policies.
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Old 12-07-2015, 09:03 PM   #5
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The powerpoint chart has no source cited and the url is not from a reputable financial news source.

How do I know the data is accurate? Or even if accurate, one can always rely on the old trick of setting a particular base year in order to favour a certain result.

Looking at the Tokio Marine Par fund, its no.1 holding is a "Far East Equity Portfolio." Compared to NTUC participating fund whose no.1 holding is Vanguard World. Furthermore, NTUC holds 67% fixed income (2014), versus TM 57% fixed income (2014)

So not surprising if TM outperformed by overweighting Far East equities over World equities and holding less bonds. Higher risk=higher potential return.

One can always hedge by getting 2 life policies, one from TM and one from Income.
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Old 12-07-2015, 10:35 PM   #6
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The powerpoint chart has no source cited and the url is not from a reputable financial news source.

How do I know the data is accurate? Or even if accurate, one can always rely on the old trick of setting a particular base year in order to favour a certain result.

Looking at the Tokio Marine Par fund, its no.1 holding is a "Far East Equity Portfolio." Compared to NTUC participating fund whose no.1 holding is Vanguard World. Furthermore, NTUC holds 67% fixed income (2014), versus TM 57% fixed income (2014)

So not surprising if TM outperformed by overweighting Far East equities over World equities and holding less bonds. Higher risk=higher potential return.

One can always hedge by getting 2 life policies, one from TM and one from Income.
My data are from a combination of information I can google, and also from the Par Fund updates I received over the past few years.

Information can be published by reputable news source such as Straits Times, but they still may not be 100% accurate. It is a fact that there is no official source compiling this information, so I did what I can to find the above information. For those who are really concerned, I suppose the only way is for them to request from each insurers their Par Fund updates from the past few years.

Regarding setting a particular base year, my original aim was to go as far back as I can with the data I had for all the insurers, which was 2005.

Yes, I agree with you that if they are indeed over-weighting equities compared to other insurers historically, that should also explain their outperformance. But personally (not everyone needs to agree with this) feel higher volatility does not necessary equate to greater risk if you have a long term view.

P.S. Comparefirst.sg lists the Par Fund performance for the latest 3 years for the insurers.
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Old 12-07-2015, 10:48 PM   #7
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Bo curry sauce

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Old 13-07-2015, 01:29 AM   #8
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Start from 100%, go up to 185% for 10 years. If using simple interest, that's only 8.5% growth a year, much lesser if using compound interest, without taking into account the fees and other charges.

Not much of a stellar record, if anything, it shows a managed fund cannot outperform a index? Amazing though that all the funds above did not fall below 100% during the crisis which is unbelievable. I wonder how they hedge it or is 2004-2008 such a great bull run that it shields any drop?
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Old 13-07-2015, 12:02 PM   #9
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Start from 100%, go up to 185% for 10 years. If using simple interest, that's only 8.5% growth a year, much lesser if using compound interest, without taking into account the fees and other charges.
Something like 6.3% compounded (1.85^0.1), which is not a very exciting return. That's the sort of money you get out of a DIY buy-and-hold-and-rebalance 60-40 portfolio, and you don't have to pay a whole year's premium in upfront fees for the DIY.

The thing I find fascinating is that they're all down 10-20% in 2008, when '08 was an absolutely fantastic year for bonds. I'm guessing these guys were all long a bunch of structured credit because they thought "oh it's a AAA but it yields like a BBB, what can possibly go wrong?", and a bunch of equity because "oh stocks have only gone up for the last five years, they'll go up forever!" and it blew up in their faces. Especially Prudential. Those guys are clearly taking more risk than the other shops.

So is Tokio Marine. These par funds are supposed to be mostly bonds - if their #1 holding is an emerging market equity fund, then they are going to get carried out feet first when the Fed starts hiking.

Not much of a stellar record, if anything, it shows a managed fund cannot outperform a index? Amazing though that all the funds above did not fall below 100% during the crisis which is unbelievable. I wonder how they hedge it or is 2004-2008 such a great bull run that it shields any drop?
Yeah, pretty much. '04-'08 was the salad days if you were long equities or (especially) structured credit.
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Old 13-07-2015, 07:27 PM   #10
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Start from 100%, go up to 185% for 10 years. If using simple interest, that's only 8.5% growth a year, much lesser if using compound interest, without taking into account the fees and other charges.

Not much of a stellar record, if anything, it shows a managed fund cannot outperform a index? Amazing though that all the funds above did not fall below 100% during the crisis which is unbelievable. I wonder how they hedge it or is 2004-2008 such a great bull run that it shields any drop?
good observation
start with base of 100,year 10 you get 180
that's CAGR 6.05%

really pathetic

and they have the cheek to:
-charge sales fees
-charge fund management fees
-introduce delays in the liquidation
-introduce illiquid into your investment
-introduce wide spreads

these daylight robbers have no value add. Risk you take, profit they suck
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Last edited by wahkao3; 13-07-2015 at 07:36 PM..
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Old 13-07-2015, 07:35 PM   #11
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Something like 6.3% compounded (1.85^0.1), which is not a very exciting return. .
how come your calculation different from mine???
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Old 13-07-2015, 07:51 PM   #12
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how come your calculation different from mine???
GPGT
seriously. are you kidding?

your future value is not the same.
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Old 13-07-2015, 08:05 PM   #13
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seriously. are you kidding?

your future value is not the same.
same mah?

he use 1-1.85, i use 100-185
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Old 13-07-2015, 08:30 PM   #14
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same mah?

he use 1-1.85, i use 100-185
Your FV is 5 bucks short of 185...
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Old 13-07-2015, 08:36 PM   #15
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Your FV is 5 bucks short of 185...
oh no wonder
hahahah
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