| Vista - By Zurich International Life (Originally published in "International Adviser" May 2007. Reproduced with the kind permission of International Adviser) "Vista" is not just Microsoft’s latest Windows software system. Vista is also Zurich International Life’s market-leading offshore savings and pension plan. Vista has been a market leader in this sector for many years. This article, part of a series of monthly product analyses using LifeBase OnLine, takes a detailed look at Vista to see just why it is as successful as it is. Company Zurich International Life (ZIL) is undoubtedly the most "international" company in the offshore life industry. ZIL was one of the earliest entrants to the industry, establishing operations on the Isle of Man, as Eagle Star (International Life), over 20 years ago before becoming part of the Zurich Financial Services group. ZIL’s business model is quite unique, with a heavy focus on the Middle East and Far East, including a strong Hong Kong presence. In The Middle East alone, Zurich has licensed operations in Abu Dhabi, Bahrain, Sharjah and Dubai, and it likewise holds full authorisation in Hong Kong, Singapore, Sweden and Switzerland. ZIL is a market leading offshore insurer in terms of regular premium business. "Vista" is a unit-linked regular premium plan - widely regarded as a definitive product in its sector - marketed by ZIL as a savings vehicle for financial planning purposes such as savings, retirement, and education fees. Individual "Vista" is accompanied by "Corporate Vista" and "Magnus" for group pensions solutions. Funds ZIL’s range of funds is one of the widest in its sector, with well in excess of 100 funds available to Vista. Vista’s investment proposition comprises a number of different fund ranges:
The Low Risk funds comprise money market funds, Guaranteed Accumulation (effectively deposit administration) funds and the Dynamic Growth fund (an 80% capital-protected equity/cash fund). Annual management charges are 0.5% for Guaranteed Accumulation, 0.75% for money market, and 1.8% for Dynamic Growth. The Managed funds comprise two sets of 5 risk-graded funds, one set being managed by Threadneedle, the other by Blackrock Merrill Lynch, both to consistent mandates. The range consists of Defensive, Cautious, Blue Chip, Performance and Adventurous funds. Funds are available in £, $ and € and have a management charge of 1.5% pa. ZIL offer an Automatic Investment Strategy (effectively lifestyling) depending upon the number of years to maturity, where the profile of Managed funds is gradually switched from higher risk funds to lower risk funds as the plan gradually nears maturity. The Mirror funds form a range of approximately 100 external funds from selected investment managers, including:
Using the fund performance tools in LifeBase, we can see that past performance in $ over 5 years (to 1 April 2007) includes high performing funds such as: TABLE 1 - 5-YEAR PERFORMANCE: TOP VISTA FUNDS
Benefits Vista has the most comprehensive range of optional risk rider benefits of any product in its sector, as Table 2 shows. TABLE 2
Design and Charges Like many offshore savings plans, Vista has an initial unit charging structure, where premiums during the initial period (18 months) are allocated to Initial units which carry an additional annual charge (4% pa). All units, including initial units, have no bid/offer spread. The % of premium allocated to units increases with premium size, though Gold, Silver and Bronze bonuses which kick in at monthly premiums of $750, $1,250 and $2,000 respectively. Taking the example of a 15-year plan, the allocation increases from a standard 100% to 107.5%, 122.5% and 137.5% of premium for Bronze, Silver and Gold respectively. Vista’s design is relatively clean, transparent, and less complicated than some other products in its peer group. A summary of the charges is outlined in Table 3 below. TABLE 3 - VISTA CHARGES
Fund switching is free (unlimited). Using LifeBase’s projections suite, it is possible to see how these charges compare against other products when it comes to projected maturity values. Table 4 shows the results for one example - a 15-year savings plan with a premium of £300 pm. TABLE 4 - PROJECTIONS
As can be seen, Vista is a competitive product, particularly when linked to its own Managed fund range. A more detailed analysis indicates that Vista surrender values are also very competitive in relation to its peer group. Summary Vista has been a market-leading savings/pension plan for many years. LifeBase’s objective analysis of the product, including:
all provide a clear rationale for Vista’s success.
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