Through our Northern Lights Variable Trust, Gemini offers a fully-integrated process to launch and distribute funds on an insurance platform.
Funds on insurance platforms, which are registered as part of a variable insurance trust, are very similar to traditional mutual funds. However, there are fewer funds available through insurance platforms than there are mutual funds. Because the competition is limited, many investment companies consider launching a fund in this channel. Investors selecting funds for their variable annuity or variable life insurance policies can only choose from those available on the insurance company’s platform, thus potentially providing a captive audience for the funds available.
Key Differences between a Variable Insurance Trust (VIT) and Traditional Mutual Fund
A fund inside an insurance wrapper has slightly different diversification requirements than a mutual fund.
VITs are required to have the same year-end close date as the associated insurance carrier.
Because insurance companies are participating in the sales and marketing of funds on their platforms, the 12b-1 fees for these funds are higher.
To stay competitive with other funds on these platforms, VIT management fees and expense limitations are typically lower.