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F&C targets pensions with diversified fund

‘There is a clear lack of multi-asset portfolios and most pension funds are far from balanced’

F&C is to target the pension market with a diversified growth fund which invests across 12 asset classes.

The fund will have maximum 10 per cent exposure to each asset class and will have a 50 per cent weighting in alternative investments, including commodities, private equity and funds of hedge funds.

It will also be managed without a UK bias to its equity holdings and will be free to deviate from traditional market cap weightings restraints. Exposure to all overseas assets will also be hedged back into the investor’s base currency.

F&C says the fund will be marketed as a more diver-sified alternative to the balanced pooled pension funds currently available in the UK.

The firm says the composition of defined-contribution schemes has changed relatively little in recent years and many schemes remain concentrated on a small number of asset classes.

Head of asset allocation Paul Niven says: “In our view, there is a clear lack of pooled, diversified, multi-asset portfolios in the marketplace and most pension funds are far from being balanced.

“If one considers the bas-ics 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.”

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