With Profit Funds

Michael Hannon Financial Services is not an Investment Manager or Stockbroker. We offer professional advice to our customers regarding your investment and savings objectives and assess your risk profile. At this point Michael Hannon Financial Services will research the market for the most suitable investment and/or savings products to meet your financial needs and objectives.

With Profits funds can be suitable for lump sum investments or regular premium investments and are considered low risk investments. Such funds are designed to protect your capital subject to remaining in the fund for the term of the investment stated at the outset, generally 5 to 10 years.

The aim of the With Profit fund is to provide you with the protection of your investment. The first protection is of your capital at the end of the term. Life companies hold back part of your investment during times when stock markets are performing well so that you are not exposed to the market falls during 'lean times'. This is known as a 'smoothing effect'.

Life companies may pay annual bonuses which are protected. However With Profits funds do not benefit from the real returns yielded by the market if the market is performing well. Likewise your investment does not suffer from falls in the markets. The actual performance of the underlying assets within the fund will be reflected in a terminal bonus declared by the life company at the end of the investment term; however this terminal bonus is not guaranteed and will depend on the investment performance of the underlying assets.

Most With Profits funds generally have equity/shares and property exposure of typically between 20% and 60%, with the remainder invested in cash and fixed income securities.