Standard Life Investments is to launch a new default fund for defined contribution (DC) pension scheme members.
The Enhanced-Diversification Growth Fund (EDGF) is a lower volatility diversified growth fund, which is designed to generate equity-like returns with lower volatility than investing in equity markets.
The fund, which will be launched in the first quarter of 2014, differs from a traditional DC default fund in a number of respects.
- It is unconstrained by index benchmarks, so it unlocks a larger and more diverse pool of return opportunities.
- It extends the available strategy universe to enhance returns and diversify risk in varied market conditions.
- It has the ability to withstand short-term market uncertainties to focus on long-term opportunities.
- Its diversification of risk provides a more predictable retirement journey for members, improving engagement and long-term commitment to savings.
Standard Life Investments will also introduce a support service to help employers and consultants engage, educate and inform DC pension scheme members about its suite of investment options.
Louise Kay (pictured), head of UK institutional business at Standard Life Investments, said: “We strongly believe that active management leads to better member outcomes from DC pensions and have built on our multi-asset investing approach to enhance our offering to meet demand in the DC market.”