Leading UK with-profits providers have no intention of following AMP's lead by severely lowering exp...
Leading UK with-profits providers have no intention of following AMP's lead by severely lowering exposure to equities to reduce risk.
As part of the AMP group's restructuring plans, the NPI and Pearl Assurance with-profits funds are to drastically reduce equity exposure in a bid to reduce risk in their products. Such a reduction in equities means the £8.1bn NPI and £11.6bn Pearl with-profits funds effectively become property and fixed interest portfolios.
Although there are concerns other life companies may follow suit, a spokesman for Standard Life said the mutual remains committed to an overweight exposure to equities relative to the market. Standard Life's £30bn fund is currently around 53% invested in equities.
Scottish Equitable has already substantially reduced equity exposure in its £4.63bn fund, to just 4.5% equities compared to 45% three years ago.
George Andrew, programme director for with-profits at Scottish Widows, predicted an increase in his group's exposure to equities. The £22bn Scottish Widows with-profits fund is currently 32% invested in the asset class and is likely to increase this as stock markets pick up, he said.
'However, I don't expect the level of equity exposure to get back to the level of around four years ago when it accounted for some 70% of the portfolio,' he added.
More than £167,000 raised
Beware ‘temporary’ vulnerability
Partner Insight: A renewed focus on 'knowledge-intensive' companies should help investors realise that these entrepreneurial companies are found in sectors other than biotech or technology.
Celtic WM and Active Wealth