View more on these topics

PPF tells trustees not to copy its derivatives strategy

The Pension Protection Fund plans to diversify its investment portfolio and improve its returns through the use of derivatives.

Its latest statement of investment principles reveals a marked shift away from the current 100 per cent bond investment strategy to include equities and property.

It plans to hold 50 per cent in global bonds, 20 per cent in cash, 12.5 per cent in UK equities, 7.5 per cent in global equities and 7.5 per cent in property. A derivative-based currency overlay will comprise the remaining 2.5 per cent.

The PPF aims to achieve 1.4 per cent above its composite benchmark.

But the move has raised concerns that solvent trustees will emulate the PPF strategy rather than tailoring their investment to cover their own liabilities.

The PPF has urged trustees not to follow its strategy but pensions adviser Ros Altmann believes The Pensions Regulator must step in to drive the message home to trustees.

She says: “Trustees should take on board the overall message of the need to protect the downside but this asset allocation is not appropriate for most trustees to adopt as the PPF liability profile is very different from that of a typical pension fund.

“One concern is this strategy will rely on enhanced indexation. That seems sub-optimal and may entail more risk. It might be more effic- ient to use a passive core of indexed funds plus long-short or absolute return managers to add manager skill returns.”

Recommended

ING enters mortgage market with direct offering

ING Direct has entered the mortgage market this week with a fixed rate and a flexible rate offering.The products are not yet available through intermediaries but ING has begun consulting about how best to work with brokers in future. ING chief executive Lindsay Sinclair says: “Research among our one million customers revealed that they want […]

Defaqto gives credence to PruHealth model

Defaqto has revealed that private medical insurance following the PruHealth approach can result in premiums up to 44 per cent cheaper than the competition. The research company says when it compared the first year premiums of five key PMI providers – PruHealth, Axa PPP, Norwich Union, Bupa and Standard Life – first year premiums can […]

Pick of the bunch

Since Ian McVeigh took over Jupiter UK growth in 2003, he has restored its fortunes as a top-performing fund. In my view, McVeigh is one of Jupiter’s most engaging fund managers and, I believe, much under-rated by the industry. At an investment dinner in 2003, attended by journalists and brokers, he was one of the […]

File checks offered online

Bankhall has introduced a compliance service that all- ows members to conduct file checks online. The service, launched at its Berlin conference, has three formats – a full review, suitability review or pre-sale review. Costs range from 30 for a pre-sale or suitability review on non-investment products to 75 for an investment, pension or mortgage […]

Stop the cold-calling

Royal London is pleased to support the petition calling for a ban on cold-calling for pension and investment products. The petition, launched by IFA Darren Cooke of Red Circle Financial Planning and hosted on the Parliamentary website, calls on the Government to ban cold-calling for pensions and investment products. A similar ban is already in force […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com