UK - Martin Currie Investment Management is opening its pan-European mid-cap equities fund - an "unconstrained benchmark" fund - to UK schemes.
Consultants – such as Hewitt Bacon & Woodrow and Watson Wyatt – have been urging schemes and fund managers to move away from traditional benchmarks, which they claim promote short-term investment attitudes and hinder fund managers’ ability to produce positive returns.
The Martin Currie fund has been open to US schemes for the past 18 months, and the firm is opening it up to UK schemes to meet what it sees as the growing demand from schemes that are disappointed with the performance of their conventional portfolios.
Martin Currie assistant director Raymond Morgan said: “The liberation of investors from the tyranny of benchmark investing has begun.
“What’s interesting here – and we should all be doing this – is that it is not constrained by the large-cap market. What these guys do is just buy stocks that they think they are going to make money out of.”
Hewitt chairman of investment policy group Kerrin Rosenberg welcomed the move.
“Generally, there has been a very positive response from fund managers and clients and we have a number who are in various stages of looking at this. I am 100% convinced that there is going to be a lot of activity on this front over the next year or so.”
Since its launch, the fund has returned 16.9% compared to the MSCI Europe index which has lost 4.7%.
Martin Currie is currently holding talks with local authority schemes and Morgan revealed that one fund is set to become the first UK pension fund investor in its unconstrained fund.
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