Metropolitan declares highest investment bonuses ever

Metropolitan entrenches position as market leader after declaring its highest investment bonuses ever

Metropolitan Life's Smooth Bonus Portfolio has out performed its competitors by declaring its highest investment bonuses to date. Yearly investment bonuses are the means by which investment performance is passed on to investors in the Smooth Bonus Portfolio. These high 2006 bonuses, which includes a 25% per annum for investments in endowment and retirement annuity policies, will see Metropolitan Life remain as the top performer in the smoothed-investment portfolio class over a 3, 5, 10 and 15-year investment horizon.

A smoothed investment portfolio strives to provide investors with exposure to potentially strong inflation-beating equity returns, but without the accompanying volatility. Such volatility can see investors lose a large portion of their invested capital when markets take a sharp downwards turn.

Quintin Augustine, Emergent-Market Product Actuary, believes that Metropolitan is well placed to continue its stellar performance. He reckons that Metropolitan was the only company that stayed within the top two performing smoothed investment portfolios over the past five years.

Says Quintin: "Our asset mangers have contributed to our strong showing in this investment space by focusing on predicting the best performing asset class i.e. equity, bonds, property or cash. Being overweight in the best performing asset class is usually the largest component driving investment return in a balanced portfolio such as Smooth Bonus".

Commenting on the outlook for markets, he states: "There are many compelling factors that are pointing to a slowdown in the US economy, which would ultimately see many emergent-market bourses like the JSE follow suit. These factors include, amongst others:

1.     A potential US housing market fallout; and

2.     US consumer confidence being at its lowest level in three years.

This coupled with so much uncertainty regarding the direction of US and European markets, makes our Smooth Bonus Portfolio a great option for the investor that does not want to risk losing their capital, but still wants to enjoy strong inflation-beating investment yields".

A comparison between inflation as measured by CPI and the investment bonuses for retirement annuity policies invested in Metropolitan Lifes Smooth Bonus Portfolio yielded the following: the bonuses out-performed inflation by 15%, 8% and 6% per year, for a 3, 5 and 10-year time horizon respectively endowment policies gave similar results.

Furthermore, a lump sum investment in the portfolio over the 6-year period ending December 2006 which includes a year in which the JSE All-Share returned a negative 8% - would have doubled since inception. Metropolitan was the only smoothed investment portfolio to achieve this feat.

(The following graph compares Metlife with its competitors (and CPI) for a 15-year R 200 pm endowment policy