Our aim in writing this paper is to show the various ways in which a life office can make a profit by varying or “switching“ its investments from time to time. We shall assume for the sake of simplicity that we are dealing with the life fund of a mutual office which has transacted all its business within the U.K. (i.e. all its liabilities are in sterling) and which does not guarantee surrender values; we shall ignore the effect of any new business which may be transacted in the future.