The board of the fund has yet to set a date for re-opening, but said investors should be able to either: remain invested; opt for a run-off share class and receive their money back as policies mature; or sell holdings to institutional investors at a discount yet to be decided.
Before any of these options are made available the board will write to investors with formal terms and await responses to ascertain what each investor plans to do. Following this process the fund, which suspended dealing from 1 December, will re-open.
The FSA first set its sights on traded life policy investments (TLPIs) on 28 November last year, calling them "high-risk and toxic products".
At the time the regulator said it found significant problems with the way the "death bonds" were designed, marketed and sold to UK retail investors.
Since then, on 25 April, the FSA confirmed guidance against the products and said it would shortly be consulting on new rules to impose significant restrictions on the promotion of non-mainstream investments, including TLPIs, to retail investors.
Investors in TLPIs put their money into a pooled investment or fund that invests in US life insurance policies. Essentially the investor is betting on when a particular set of US citizens will die and if the individuals concerned live longer than predicted the investment may not function as expected.
But EEA said policy maturities between 1 December 2011 and 1 June 2012 (the six months dealing has been suspended) had generated $75m of pay-ins for the fund.
"These latest figures show that the underlying assets of the fund continue to perform as expected. One of the options likely to be offered to investors wanting to redeem when the fund reopens is to move their investments into a run-off vehicle. The experience of the past months underlines how the fund is continuing to benefit from maturities at significant rates and will bring reassurance to those who might be considering this option," said Peter Winders EEA marketing director.
He added: "These figures serve to highlight how traded life policy investing, when done prudently and well, can be a rewarding investment strategy. As such the asset class is likely to remain attractive to sophisticated individual investors and institutions in the UK and globally."
