F&C is launching a diversified growth fund which it says aims to address the lack of portfolio diversification across pension schemes.
F&C says the fund will offer an alternative to the balanced pooled platforms currently available in the UK market place.
The F&C diversified growth fund has a 50 per cent exposure to alternative assets.
F&C says the composition of defined contribution schemes has changed relatively little in recent years and says that DC schemes remain concentrated on a small number of asset classes.
F&C head of asset allocation Paul Niven says: “In our view there is a clear lack of pooled, diversified, multi-asset portfolios in the market place and most pension funds are far from being balanced. If one considers the basics in terms of investment, diversification is the most important principle that a pension fund should follow and what we have created is a product which has a diversified mix of assets and delivers performance in an efficient manner.”
At inception, the fund will have exposure to 12 different asset classes with no single asset accounting for more than 10 per cent of the total portfolio.
The fund will have significant exposure to alternatives with asset classes such as commodities, fund of hedge funds, property and private equity accounting for 50 per cent of total assets.
F&C asset allocation team fund manager Toby Vaughan says: “All pension schemes can benefit from an efficient combination of return seeking assets and our new vehicle offers an improved risk return trade-off to traditional balanced portfolio.”