Investors Trust (IT) offers a lump sum product, called the Access Portfolio Bond, to global investors.
This article will review the product and explain why some investors will get good returns and others won’t.
If you have an Investors Trust Access Portfolio, or have been proposed one and want a second opinion, you can email me on advice@adamfayed.com, or contact me on the chat function below.
The article will also briefly review the fixed income and platinum portfolios as well – two other lump sum options on Investors Trust.
Who are Investors Trust
Investors Trust are a firm based out of Puerto Rico, Malaysia and Cayman Islands, with service officers in the United States and Latin America.
They have been in the market since the early 1990s and have about $2 billion assets under management (AUM).
They have both local and expert clients globally, with a big reach in Latin America and the Asia Pacific in particular.
Where is the platform sold?
Worldwide, but often in expat-focused areas such as Dubai, Shanghai, Saudi Arabia, Hong Kong, Singapore, Brussels, Bangkok, Kuala Lumpur, Qatar and various other locations.
For locals, Latin America, Japan, China, Russia and South Korea are probably the biggest markets.
What are the account minimums?
For the Access Portfolio, $75,000USD, 75,000 Euros and 50,000GBP are the minimum account sizes.
The minimum additional investments are 5,000GBP, 7,500USD and 7,500 Euros respectively, for top ups.
What is the duration of the investment?
Different periods can be chosen. 5 years, 8 years and open-ended charging structures can be picked on day one.
There are no early surrender charges if the open charging structure is put in place. In comparison, early surrender charges exist if you wish to leave the investment early on the 5 year and 8 year options.
The three different products are called the Access 5000 series, the Access Portfolio 8000 Series and the Access Portfolio Plus
What are the costs of the platform?
It depends which option is chosen. The Access Portfolio Plus only costs 1% per year for admin charges, whereas the Access 500 Series is charged at 1.8% per year and policy fee of 180USD per quarter.
What are the positives of the platform?
The main positives are:
- Investors Trust offers an excellent online system, with ease of topping up, withdrawal and other admin done efficiently. The costs are also reasonable, depending on the charging structure chosen.
- Passive investments like ETF index trackers can also be picked, thereby reducing cost.
- In general, they have excellent and varied fund choices. Perhaps less than 1-2 other platforms, but more than some other options in the market
- There is a borrowing facility although this is expensive.
- Regardless of the option you pick, it is quite flexible, in terms of withdrawals. Within 5 years, it is usually 100% flexible.
- Multi jurisdictions is a key advantage of the Investors Trust system. You have the option between Malaysia, Puerto Rico or Cayman.
- Importantly, each of the three locations offers checks and balances. So your assets are always separate to the companies assets. This is very different to investing with a bank, where the institution uses your money to lend to depositors. This lowers risk a lot.
- Good banking system with HSBC used for the USD bank accounts.
- You can pay online, even for lump sums, or via bank transfer. Of course, with bigger lump sums, it isn’t very practical to invest $200,000 by card, unless you pay $10,000 per time. For smaller amounts, this feature is excellent, as it lowers the cost in most cases.
- It is usually a tax efficient option. Investors Trust don’t give out tax advice, and indeed tax rules can always change quickly. What is true though is that they are based in tax efficient locations. Therefore, especially for expats that are living in low or 0% capital gains environments, this is a good option. In comparison, if you use a platform located in a high-tax country which decides to apply capital gains even to non residents, you could get hit by taxes.
- Compared to some of the typical investments in the expat market like those discussed below, this is a good option.
What are the negatives associated with this option?
The main negatives are:
- The fact numerous fund options can be chosen is great, but that does mean that some clients are in expensive funds, whereas cheaper options exist on the same platform. Two investors who have different funds will get very different results, even on the same platform.
- The minimums are higher than some other options
- American expats can’t be accepted for this platform and there are additional restrictions, such as Hong Kong residents, and those in places under US sanctions, such as Iran. However, this is still much more flexible than some providers, that have a huge list of countries they can’t accept for.
- Only USD, Euros and Pounds are available. This is a small issue though, in this day and age, with countless ultra cheap options available for Australian, Japanese and other investors.
Are the majority of clients happy?
I have met countless happy clients who are in this lump sum option.
I have also met numerous people that have lost contact with their advisor, or been put into unsuitable investment options within the platform.
What have been some of the best performing funds on this investment platform?
That depends on which timeframes you look at. In recent years, US markets have done best, with emerging and energy-linked ETFs, facing downward pressure, with a lower oil price.
Sometimes today’s winners are tomorrow’s losers, and vice versa, though.
A great example of this is if you compare US and international stocks.
Historically, each has a period of over performance, according to work from Fidelity.
So it always pays to have a well diversified portfolio.
What are the full list of investment managers available?
On the access portfolio, there are too many options to list here, but the most popular ones include:
- Ishares
- Blackrock
- Morgan Stanley
- Pimco
- Janus Henderson
- Franklin Templeton
- MFS
- Investec
- Fidelity
- AllianceBernstein
Vanguard isn’t available on this platform, but the iShares S&P500 index performs almost identically to Vanguard’s equivalent.
What about if you don’t have $75,000 or currency equivalent?
Investors Trust do have a smaller lump sum product called the Platinum.
It starts from $10,000/10,000GBP/10,000 Euros. This product has less investment choices than the access portfolio, but does have some of the better fund options, such as the S&P500 index fund.
In general, the fees associated with the Platinum can be higher than the Access portfolio, but that depends on which option you select, as there are three options associated with the Platinum portfolios.
Are there any other lump sum options?
For people looking for pure income, Investors Trust have a fixed income portfolio.
This portfolio gives you the option to invest for 3, 5 and 15 years. The 3 and 5 year rates are fixed, with a minimum contribution of $10,000.
The rates on offer are very low though – 2.25% for 3 years and 3% for 5 years, so this should only be considered as a slightly better option than keeping your money in the bank.
What can you do if you have an Investors Trust plan which isn’t performing well?
If you have an Investors Trust Access Portfolio and you aren’t satisfied with the returns, there could be two reasons for this.
Either markets aren’t performing well, which can’t be helped in the short-term. In comparison, the second reason is that bad funds have been picked.
In which case, it should be much easier to make the account work more efficiently. If you have this plan, don’t hesitate to contact me below.
Conclusion
- In general, Investors Trust is an excellent option in the expat market, but only if it is used in the right way.
- Investor A, with advisory firm A, can do much better than investor B, with advisory company B, on the same platform.
- So in many ways, the advisor you pick is more important than the platform itself.
