Insured funds vs Institutional
Hi all
Does anyone have a document or link to a provider PDF that describes the differences between an insured fund and its institutional companion?
I believe insured funds are generally cheaper and issued by a life office (am I correct?), but I could do with some more reading on why this is and why they may have lower charges than institutional unit classes.
Many thanks
Comments
My understanding -
Institutional - Share class reserved for corporate customers (cheapest)
Retail - Share class for everyone else
Insured - The version of the fund bought via a personal pension (e.g. the Clerical Medical Invesco Perpetual....)
The differences between them isn't too vast. They're all unit-linked funds.
Adding a bit more to this... A life/pension office will create an insured 'mirror' fund so that it can deliver the returns of the fund but apply its own pricing structure within a particular product. So you will often see multiple series numbers as a suffix to essentially the same fund in legacy life and pension business fund tables, each series number with its own charge.
The pricing can be better or worse, and just as with institutional 'superclean' share prices that are platform specific, so a life/pension provider can negotiate a better price for the cost of the fund when purchased through its mirror. Often though, it's more expensive.
The other point on insured funds is that the regulatory protection through the FSCS is long term insurance category so, to the extent that it has any value at all, it's significantly higher.
And there are no mifid ii reporting requirements on insured funds (but IDD applies).