IRELAND - Deutsche Asset Management (DeAM) has launched the Deutsche GlobalSpectrum Common Contractual Fund which combines withholding tax break benefits of segregated US equity holdings with lower costs of pooled funds.
State Street Corporation has been appointed investment service provider for the fund.
DeAM expects total assets under management to reach £500m once clients move their assets from other portfolios. Currently, the fund manager has investors with assets totalling £128.6m ready to invest in the fund
The fund is aimed at small and medium-size UK pension fund investors for whom holding a portfolio of US equities has not previously been financially viable.
DeAM said that the fund was the first of its kind to take advantage of regulatory changes in Ireland, where it will be domiciled, which allowed for pooled funds to receive US equity dividends free of US withholding tax. This new structure will result in annual savings of 30 bps.
Paul Berriman, UK CEO of DeAM, said: Until now, many small and medium-sized institutional investors who wanted to take advantage of liquidity and growth opportunities in the US market have been unable to do so because they would have suffered withholding tax charges.”
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