By Robert Stock Threadneedle has launched into the defined contribution marketplace with an offer...
By Robert Stock
Threadneedle has launched into the defined contribution marketplace with an offering based around 19 pooled pension funds.
Sixteen of these funds cover the world's major equity and bond markets and Threadneedle Pensions has also included three managed funds branded "Pathway", each with a different risk and reward profile.
The cautious fund is to be split 50% in fixed interest and 50% in equities. The balanced fund will have 75% in equities and 25% in fixed interest. The adventurous fund will be entirely invested in equities. In each of the funds the equities component will be invested 50% in the UK and 50% overseas.
None of the funds will be benchmarked against actuarial indices, meaning that they will not be tied to the patterns of investment by other pensions funds.
Mark Stanley and Emma Douglas co-head Threadneedle's DC business, which is aiming for distribution amongst top-end pensions consultants and intermediaries.
The launch, which draws heavily on the experience of Threadneedle's US partner Zurich Scudder, has a specially tailored communications package for scheme members and trustees.
It includes a user-friendly guide for scheme members to help them select an appropriate balance of funds by providing a clear guide to risk, return and different asset classes.
The team is launching a website for scheme members, designed to help visitors identify their personal risk profiles and investment "routes" matching their investment aims. Quarterly reports will be available to participants via the internet and in hard copy.
Zurich Scudder Investments Limited in London manages nearly £50bn, including £18bn for pension fund clients. World-wide, the parent organisation, Zurich Scudder Investments Inc has more than £238bn assets under management, including a 401(k) pensions business in the US, with more than one million participants. The American team has provided input to the Threadneedle launch particularly in the area of communications and technology.
Stephen Cohen, head of institutional business development at Zurich Scudder, said: "This new business is a key development for us. We are steadily winning new mandates from defined benefit funds on the back of quite outstanding performance. But overall this is a relatively mature business segment. We expect to see good growth in defined contribution pensions and we aim to have a growing brand in a growing market."
Threadneedle's launch into the DC marketplace follows on from that of Invesco earlier this year which has produced a product branded "Different".
Threadneedle funds are included on the Invesco platform as part of a range of external links which is being planned. Two weeks ago Threadneedle was also named as an external fund link on Merrill Lynch's stakeholder offering.
Threadneedle has no plans as yet to offer external fund links through its defined contribution business.
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