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Zurich is shutting Eagle with-profits for smooth fund

Zurich Financial Services is to shut the door on with-profits by closing its Eagle Star fund and replacing it with what it says is an innovative smoothed equity fund.

The fund, designed with an unnamed major bank, will offer a transparent daily price and a guarantee of 80 per cent of an investment&#39s highest value, made possible by equity and cash switching techniques.

Eagle Star&#39s current fund 100/0 fund replaced its £3bn traditional 90/10 fund which closed in 1995. The ringfenced 100/0 fund has 53,000 policyholders with a total of £1.5bn. It will be closed at the end of the year although incremental investments will be allowed.

The company has promised that both closed funds will continue to be actively managed by Threadneedle. At present, with-profits accounts for only 5 per cent of its IFA sales through its Zurich IFA subsidiary.

Zifa managing director Jim Reeve says: “With-profits will continue to serve customers well but there is an increasing demand from IFAs for a new generation of fund which better meets the needs of many consumers by offering greater transparency while protecting the consumer from the extremes of market volatility.”

Chartwell Investment Management director Patrick Connolly says: “I would not be surprised if they got rid of the Eagle Star brand.”


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Merrill Lynch Investment Managers – European Growth Fund

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Preparing for the changes to the pensions market

As more and more providers start to reveal their stance on the charge cap and removal of commission and active member discount pricing, we thought it would be worthwhile to look at what these are, and the steps businesses should be taking to prepare for this.


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