LU JIA JUN
Rules written in calm, followed in chaos.
PEAK is the written method behind how I advise on the funds inside my clients' policies. For Great Eastern investment-linked policies that invest in GreatLink funds, I offer two portfolios: one 100% in equities, built around four or five funds, and one 100% in bonds. PEAK is how I look after them: daily checks, a quarterly review of the line-up, and a call from me when something needs a decision. The worst investment decisions are made under pressure, so the rules are written before the pressure arrives. This page explains how it works and what it will not promise you.
Every fund, every market day.
I check each fund in your portfolio every market day, and the portfolio as a whole, including how far each fund has drifted from its target weight. A policy reviewed once a year finds a problem up to twelve months late. A policy checked daily finds it the same week.
Checking is not the same as acting. Most days the right action is nothing. Changes to the line-up and to the mix are made at the quarterly review, under a written rule, not on a day's headlines. If something needs your attention sooner, I contact you to talk it through. Nothing is switched without your instruction, and a switch is made at the next price after your instruction, so prices can move in between.
Two portfolios, reviewed every quarter.
For Great Eastern investment-linked policies that invest in GreatLink funds, I offer two portfolios. One is 100% in equities, built around four or five funds. The other is 100% in bonds. Your risk profile decides which suits you. If neither suits you, I will say so.
Every quarter I review the equity line-up against a written rule. A fund is replaced only when the rule says so, and the reason is written down before anything changes. If it affects your policy, I explain it to you, and the switch is yours to decide.
Back to the plan.
Markets pull funds away from their target weights. At each quarterly review, if a fund has drifted too far, I recommend bringing your portfolio back to its target mix. At present, switching funds costs nothing in Great Eastern's current investment-linked plans, though Great Eastern can introduce a fee with notice; older policies may differ. Some plans also offer an optional yearly rebalance that you can choose to switch on. Any switch, top-up or withdrawal you make turns it off until you ask again.
Every switch I recommend comes with the reason and the costs in writing, and it happens only once you approve it.
What PEAK will not do.
It will not predict markets. It holds no view on where any index goes next month. It only sets out when I call you and what we review.
It will not eliminate risk. Funds can fall and stay fallen, and a rules-based plan applied to a structurally broken asset just loses money in an orderly fashion. Fund selection comes before the rules, not after.
It will not beat every market. A portfolio spread across many companies can rise less than a single sector when that sector leads. A 100% equity portfolio can also fall hard. The MSCI World Index fell by more than half in US dollars from October 2007 to March 2009. That is history, and past performance is not necessarily indicative of future performance. If a fall like that would keep you up at night, the equity portfolio is not for you, and I will say so.
It does not act on its own. A daily check or a quarterly review can lead to a recommendation, never to a trade on its own. Nothing is switched without your instruction, and a switch is made at the next price after your instruction.
It does not promise returns. Past performance is not necessarily indicative of future performance, and any figures I show you in a review come with that statement every time.
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