GLOBAL - The Vanguard Group has launched a common contractual fund (CCF), with more than US$10bn in assets under management, in the pension pooling marketplace.
The CCF has taken the form of an open-ended umbrella structure domiciled in Ireland, and established under UCITS III guidelines.
Shellie Unger (pictured), managing director of Vanguard Investments Europe, said cross-border pooling provided greater opportunity for centralised governance.
“The benefits of scale are magnified when it comes to indexing, where economies of scale are of prime importance,” she added.
The benefit of a CCF is believed to be its tax transparency and economy of scale. The vehicle was designed to permit a pension fund or other institutional investor to achieve the same tax treatment as if it invested in the underlying securities directly.
This can allow for the reduction or even elimination of dividend withholding taxes for qualifying pension funds and other institutional investors.
The Vanguard Group is an independent asset manager with more than e840bn in AUM, and of this approximately e350bn in index funds.