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Fidelity targets DC market with lifestyle funds

Fidelity is looking to strengthen its foothold in the defined-contribution pension market and develop a range of actively managed lifestyle funds.

The fund firm hopes to launch a number of products next year based on its existing target funds but with a longer time horizon.

Fidelity says it will consider putting forward a target fund for inclusion in the personal account regime if such funds are allowed to be marketed. A discussion paper on the personal account fund range is due out in the next couple of months.

The target funds are actively managed funds that are positioned more aggressively the further an investor is from retirement. They then move into lower-risk assets as the investor approaches retirement date.

Unlike many lifestyle funds, which use programmed trades, Richard Skelt and the multi-asset team, who oversee the funds, choose when to switch assets, so they can avoid selling equities during a market crash, for example.

Fidelity runs similar vehicles in the US and believes they would be well suited as default funds for the group personal pension market.

Head of DC business development Julian Webb says: “This is something we are actively looking at for the DC market. They are a straightforward concept but achieve a great deal. It is a one-off decision for the investor but they get active management and equity exposure.”


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