In October 2008, the senior vice-president for product and business development at IA Clarington (IAC), a life and health insurance firm, was arranging for a conversation with the president of IAC. The topic of argument would be IAC's Target Click Fund, a mutual fund with an options-based assurance construction targeted towards investors who were looking for increase together with capital preservation.
The vice-president was asked to deliver his opinion of whether he believed the fund's scheduled rebalancing date should be accelerated in order to benefit from a historical decline in worldwide equity markets. The vice-president had to believe quite a lot of pieces of advice in making his recommendation, including that fact that his chief challengers would be quick to take advantage of any misguided recommendation. He wondered if the markets had actually hit bottom, and how/if he could time the rebalancing to the lowest point. Additionally, the investment philosophy behind IAC and click funds encouraged investors to stay invested during turbulent times: what would changing the rebalancing date suggest to those investors?
PUBLICATION DATE: October 27, 2009 PRODUCT #: 909N22-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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