UK - Defined contribution scheme members can boost the value of their funds by using actively managed funds, Merrill Lynch Investment Managers claims.
The firm said the outperformance of active management will result in members having at least 20% more in their pension pot when they retire. As an example, the firm pointed out that during the second quarter of 2003, the MLIM DC Balanced Growth fund – which currently has £309m in assets under management – produced a 13.2% return, compared to the CAPS pooled balanced median, which was 11.2%.
At the same time, the firm’s £456m DC UK Growth Fund returned 16.7%, while the FTSE All-Share returned 14.5%. MLIM’s DC 70/30 Global Growth Fund also outperformed, returning 16.2% during the second quarter, compared to its benchmark, which posted a 14.7% return.
MLIM head of institutional business Andrew Dyson said: “This highlights the benefits that active managers can bring to members of defined contribution schemes – 1% per year of added performance can mean a 20% or more improvement in your pension in the end.”
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