UK - The National Employment Savings Trust has appointed State Street Global Advisors, UBS Global Asset Management and BlackRock to run five mandates for its default fund.
The three asset management firms will run five mandates - a passive global equity brief; a passive UK fixed gilt mandate; a passive UK index-linked gilt portfolio; a sterling cash offering; and a diversified beta fund mandate.
UBS Global Asset Management Life has won passive global equity brief with its UBS Life World Equity Tracker Fund.
State Street Global Advisors won the passive UK fixed gilt and passive UK index-linked gilt business with its State Street UK Conventional Gilts All Stocks Index Fund and State Street UK Index-Linked Gilts Over 5 Years Index Fund.
BlackRock will provide NEST with sterling cash and diversified beta funds using the BlackRock Aquila Cash Fund and the BlackRock Aquila Life Market Advantage Fund.
NEST said these funds would together provide the building blocks for its yearly target date funds, its default fund offering.
NEST chief investment officer Mark Fawcett (pictured) explained: "The infrastructure we are putting in place will give our members access to a diverse set of global asset classes, through NEST-constructed yearly target date funds, which will help us to manage investment risks in a way that's appropriate for them.
"Everything we do is focused on helping our members achieve good outcomes - we believe these funds will allow us to create a strategy that will help us to do that."
The appointments come on the back of huge demand from asset managers to manage the funds.
Last month, PP reported that NEST had received 163 individual expressions of interest from fund managers to run the five mandates.
From the initial expressions of interest received, 58 asset managers made formal request for proposal submissions for the five mandates, with the diversified beta fund leading the pack with 21 RFPs.
The low-risk cash management brief had 18; global equity received eight; UK fixed interest gilts had five and UK index-linked gilts had six
NEST has also put out mandates to run a pooled SRI equity fund and a Shariah compliant global equity fund.
The deadline submissions to run the SRI fund was 14 January. The entry period to tender for the Shariah fund ends at 11am tomorrow.
The mandates in full are as follows:
Mandate 1 - Passive Global Equities: UBS Life World Equity Tracker. This fund, managed by UBS Global Asset Management Life, tracks the FTSE All-World Developed Index.
Mandate 2 - Passive UK Gilts: State Street UK Conventional Gilts All Stocks Index Fund. This fund tracks the performance of the FTSE Actuaries UK Gilts All Stocks Index.
Mandate 3 - Passive UK index-Linked Gilts: State Street UK Index Linked Gilts over 5 Years Index Fund. This fund tracks the performance of the FTSE Actuaries UK Index-Linked Gilts over 5 year Index.
Mandate 4 - Sterling Cash: BlackRock Aquila Cash Fund. This low risk fund aims to maximise current income, consistent with preservation of principal and liquidity, by the maintenance of a portfolio of high quality short-term Sterling "money market" instruments.
Mandate 5 - Diversified Beta: BlackRock - Aquila Life Market Advantage Fund. This fund, managed by BlackRock Asset Management Pensions Ltd, invests in a wide range of asset classes, primarily through Blackrock's range of pooled index funds. This fund's objective is to deliver returns similar to a 60% equity:40% bond portfolio over the long run, with 40% lower risk. A key feature of the fund's asset allocation process is the focus on risk management, which (a) designs a portfolio that has a balanced exposure to the range of fundamental risks and (b) incorporates strategies to manage portfolio risk at market extremes.
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