Individual Investment Savings Plan
Bermuda Individual Investment Savings Plan
We all know that we should be saving money, whether it’s to buy that dream house, set something aside for your child’s education, or for a comfortable retirement. But the reality is that putting money aside can be difficult. LOM Securities (Bermuda) Limited has a simple investment savings scheme that can help you achieve your goals.
Savings Tips
• Set goals – whatever your reason for saving, setting goals will keep you motivated.
• Start early – the longer you save, the more time your money has to grow.
• Save as much as you can – a few extra dollars now can mean a larger pot of money when you need it.
• Create a good mix – the right allocation among stocks, bonds and cash investments can have an enormous effect on your savings. LOM will assist you in choosing the right mix for your needs.
• Leave your savings alone – give your money time to grow.
• Don’t try to anticipate the movements of the market. Sure, you can make adjustments every so often but the best advice is to pick your long-term strategy and stick with it.
• Do not be alarmed by media scare stories.
Why Put Money Aside For The Future?
• Social Insurance will probably cover less than half of what you’ll need for retirement.
• People are living longer – 20 or 30 years after they stop working. That’s a long time to live off your savings.
• Inflation will always be a factor. Over time, even low inflation rates can eat away at the buying power of a dollar, making that dream home that much harder to buy.
Projected Value of Your Investment
| Sample Monthly Contributions | 5 Years | 10 Years | 15 Years |
|---|---|---|---|
| $100 | $7,542 | $19,352 | $37,840 |
| $500 | $37,712 | $96,758 | $189,201 |
| $1,000 | $75,424 | $193,515 | $378,405 |
| $2,500 | $188,560 | $483,785 | $946,015 |
These projected values assume a compounded annual return of 9%; actual performance cannot be guaranteed. This example is hypothetical and does not represent the returns from any particular investment.
Here's How The Plan Works
• LOM representatives will meet with you to discuss the Plan in detail and to discuss risk tolerance, fund choices and help complete account forms.
• Proof of identity (valid passport or driver’s license), a copy of current bank statement and verification of physical address is required.
• Low monthly minimum investment required of $450.
• No set-up fees or costs.
• Opportunity for your savings to work harder than bank deposits.
• The LOM Plan provides an additional level of savings, added diversification to a company pension plan and reduced fees (no pension fund administration fees).
• Standing order from your bank is generally set up for your weekly, bi-monthly or monthly contribution.
• Changes to fund allocations can be done whenever requested.
• No tax is charged for exchange from BMD to US dollars when funds are returned in BMD dollars.
• Applicable FX rates will apply for investment in non-US dollar denominated funds.
• Easy access to savings when you need them – funds are not locked-in.
• Online access to statements.
The Investment Choices Available Are:
Preservation of Capital
• The LOM Money Market Funds (USD, CAD, EUR and GBP)
Your primary goal is capital preservation. Through active management these funds’ objectives are to achieve a return in line with short-term money rates of the relevant currency.
Conservative
• The LOM Fixed Income Fund (USD)
You are prepared to experience some fluctuation in value but capital preservation is very important to you. This fund mainly invests in US government bonds, corporate bonds, convertible securities, asset-backed securities and mortgage related securities.
Moderate
• The LOM Balanced Fund (USD)
You appreciate the benefits of investing in shares and bonds and are prepared to experience some risk in the value of your account for the long term potential of future gain. This fund invests in a combination of equity funds, fixed income funds, hedge funds and commodity funds. The investment objective is the growth of capital and the production of income.
Aggressive
• The LOM Global Equity Fund (USD)
You fully appreciate the long-term capital growth potential and dividend income that shares can provide and you are prepared to accept increased risk in the value of your capital that comes with share-based global investments. This fund invests in large cap, blue chip equity securities worldwide.
• The LOM Global Equity Fund (Ex-US) (EUR)
You fully appreciate the long-term capital growth potential and dividend income that shares can provide and you are prepared to accept increased risk in the value of your capital that comes with share-based global investments. This fund invests in large cap, blue chip equity securities in Europe, the Far East and Australasia.
If you’re uncertain about how to begin, try starting with a small amount that you are comfortable with. Then increase it by a specific amount like 1% at regular intervals – such as a particular time of year or whenever you receive a raise. Before long, your savings will be growing and you’ll hardly even notice the effect!
Program Details
Withdrawals
All funds except the Money Market Funds have a redemption fee of 1% in the first year. However, up to 10% of the fund value may be withdrawn without penalty in the first year. After the first year, withdrawals (of any amount) can be made without penalty twice each year. LOM reserves the right to charge $50 for each additional withdrawal to encourage this to be a savings plan.
The Money Market Funds have the ability to withdraw any amount twice each year, including the first year. LOM reserves the right to charge $50 for each additional withdrawal to encourage this to be a savings plan.
If you discontinue the minimum monthly contribution of $450, you may do any of the following:
• Leave the account invested without further contribution required (available if the balance is more than $5,000).
• Close the account and receive the funds as a lump sum cash payment in the currency the account was established in.
Reporting
Your account statement will reflect any and all activity in the Plan. Fund prices are also quoted on Bloomberg, on http://server52086.uk2net.com// and in the Royal Gazette.
Legal Disclaimer
All funds are offered in accordance with the terms laid out within their relevant Information Memoranda. The relevant Information Memoranda per fund contains further information on risks, advisory fees, distribution charges and other expenses and should be read carefully before anyone invests or sends money. Fund Information Memoranda are available on http://server52086.uk2net.com// and from the Fund Manager.
LOM Securities (Bermuda) Limited is licensed to conduct investment business by the Bermuda Monetary Authority
