for its 14, mostly fixed income, mutual funds which already have net assets of around half a billion dollars.

MRM sees the funds as responding to the reservations long held by captive insurers about such funds.

The funds have delivered returns from 5.08 percent to 55.71 percent since inception a year ago April.

Subsidiary MRM Financial Services Ltd. has found a lot of interest in the funds from mostly institutional investors, such as captives and rent-a-captives, but also from high net worth individuals.

At the centre of that marketing effort is MRM Financial vice president Frances D. Tucker, who observes that captives are being used increasingly as a cash management facility, and mutual fund investing may have been overlooked as a tool toward that goal.

Historically, captive insurers have found investment vehicles expensive, often directed at equities, and not necessarily geared toward the captive client.

Traditional methods of investing required large portfolios, sometimes of $20 million, to gain access to the desired portfolio managers and achieve a satisfactory return.

When selecting investment vehicles, risk managers want firstly to safeguard their principal sums invested in cash, fixed income or equities and select a reputable portfolio manager.

Apart from safety of principal, captive insurers are also concerned about performance, costs, diversification or the spread of their risks and the flexibility to move from one manager to another, together with the mobility to move assets in and out expeditiously.

Choosing reputable managers from Bermuda and overseas, MRM set up the 14 no-load funds a year ago, with wide diversification and competitive management fees.

Ms Tucker said key bonus features included a letter of credit (LOC) facility, enabling the funds to be used as collateral for the LOC. And the collateral margin is 100 percent.

She said: "We've got the capability of diversifying for the client. There are cash funds, fixed income and equity funds. In effect, the investors can create their own portfolio. We can tailor-make a programme that can fit their own risk tolerance and cash needs within one family of funds.

"They are traded on a weekly basis, so we are flexible enough that assets can be freely moved in and out of funds.

"The other thing is that there are well-known managers, like Morgan Stanley, and normally you would require many millions to get in. But here you only require a minimum of $100,000, allowing more companies and individuals to enjoy the expertise of these well-known managers.

"I think that the letter of credit facility is a huge selling point for captives, too, because it is inexpensively priced at 20 basis points. We are also giving dollar for dollar.

"If an institution confers one million dollars and requires a letter of credit, we will give them a million dollar LOC. A lot of companies won't do that, but would give between 50 and 90 percent.'' Apart from the captive insurance industry, MRM Financial has been marketing the business to offshore trusts.

Vice president Iain L.C. Brackstone said: "It's also available to MRM Life, our life insurance company. And for US investors, when they come offshore they have more, and flexible, investment options.''