Insurer Zurich has given BlackRock the mandate to passively manage some of its funds sold through Allied Dunbar and Eagle Star brands in a move that aims to create stability for investors.
The funds, which represent 20% of Zurich's £15bn unit-linked managed funds, will be invested on an index tracking basis by BlackRock Tracker Unit Trusts.
The insurer said today it was responding to a change in market developments and wanted to reduce volatility to give its policyholders the opportunity for better risk-adjusted returns.
It said there would be no change to the investment objectives of the managed funds and the remaining 80% of the funds will remain actively managed by Threadneedle, which has held the mandate since 1997.
Zurich UK Life chief investment officer Vince Rennie said: "Like any responsible provider, we keep our asset management arrangements under review to manage their underlying risks while trying to ensure we deliver strategies well positioned to deliver additional benefits for customers.
"We are very pleased with the long-term performance of our funds and we believe these changes will strengthen our ability to deliver sustainable and competitive returns for our customers.
"We believe this change will enable us to maintain the strong investment returns generated in these funds more efficiently in terms of the underlying risks and volatility."
BlackRock Financial Institutions group global head David Lomas added: "We are honoured to be entrusted with such a significant brief, spanning a wide range of investments including in equities and fixed income. Zurich is leveraging the best of BlackRock's passive capabilities and we look forward to partnering with them to ensure they realise significant benefits for their customers."
Zurich moved its Japanese equity assets to be locally managed by Nikko Asset Management earlier this year.
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