In advising on the apportionment of a fund, an actuary is faced with practical problems of admitted difficulty. The following notes are an attempt to discover exactly what these problems are, and to determine the methods of approach most likely to lead to a satisfactory solution.

Trustees looking after a settled fund have a different attitude to investment from that of persons controlling the investments of a life assurance fund. The funds of a life office are normally increasing; in such a case it is easy to see that the object of investment policy is to secure accumulation at as rapid a rate as is consistent with safety. Changes in the portfolio can be considered which do not necessarily result in an immediate increase in current income. The securing of a capital profit or the avoidance of a prospective capital loss by a sale and reinvestment may be a valuable source of strength. Trustees, on the other hand, cannot ignore the importance of a high level of current income, for a trust fund is normally invested to produce income for disbursement, and there is a vital distinction between trust ‘capital’ and ‘income’.