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ScotEq offers hybrid fund through bond

Scottish Equitable is using a hybrid of passive and active management to increase diversification in its multi-manager-style universal balanced collection fund.

The unit-linked fund, which has just been made available through Scottish Equitable’s investment bond, mirrors the universal balanced collection pension fund which was established in 2001.

It is currently Scottish Equitable’s biggest selling pen- sion fund and has grown to over £1.74bn since launch. An offshore version is also being offered through Scottish Equitable International.

Around 75 per cent is invested in Scottish Equitable’s balanced passive fund, which is managed by Merrill Lynch and invests mainly in tracker funds. The remaining 25 per cent will be invested in five balanced managed funds run by Baillie Gifford, DWS, Merrill Lynch, Newton and UBS.

The investment split between these five funds will be constantly reviewed and changed if necessary by ScotEq’s investment committee.

All five funds are in the balanced managed sector but take different investment approaches. Baillie Gifford is a top-down manager with an equity bias, UBS focuses on undervalued stocks, while DWS emphasises stock selection over asset allocation. Merrill Lynch believes a mix of value and growth investing is the best strategy while Newton looks at global trends and themes.

Scottish Equitable product marketing manager, capital investments, Jacqueline Dow says: “The fund is not being limited to actively managed or passively managed styles and we think this hybrid approach adds to its appeal.

“We are blending different styles of investment with the ultimate aim of getting better returns. It is just reflecting what a lot of people are doing themselves within their portfolios but we are offering it in a packaged form.”


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