UK - Schemes and policyholders will desert NPI and Pearl's with-profits funds following their decision to pull out of equities, a leading IFA claims.
Both Pearl and NPI have announced they are to cut the equity allocations in their with-profit funds dramatically in favour of fixed interest securities and property to reduce their risk profile.
The move follows a decision by their parent, AMP, to exit the UK market.NPI’s £8.6bn fund is cutting its equities allocation from 38.6% to zero, while the £11.6bn Pearl fund – which last year had 33.7% in stocks – will maintain a small “rump” of equities.
But IFA Hargreaves Lansdown said that because equities produced superior returns over the longer-term, this would render the two funds unsuitable for many investors.
Pensions research manager Tom McPhail said: “NPI wrote a lot of group pensions business in the 1990s, and employers and scheme trustees made the decision to buy into what was at the time, a strong with-profits office.
“What NPI now has is Henderson running two fixed interest and property funds, and it may therefore feel that this is not appropriate for its employees.”
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