UK - The National Employment Saving Trust is set to develop its own internal market to switch equities and bonds between members' funds, its head of investment policy says.
The internal market will shift assets from fund to fund to assist NEST’s target dated member approach and act as an alternative to buying and selling assets on the external market.
NEST said it would slash time and cut costs to move assets between member funds.
Head of investment policy Paul Todd said: “NEST can develop an internal market where you are selling units from one fund to a newer fund that has just been created.
“This means we don’t have to spend lots of time selling equities to buy bonds and having the drag you get with traditional lifestyle approaches.”
NEST is the state-introduced defined contribution scheme put in place prior to auto-enrolment’s roll out next year.
The use of target date funds will mean different age cohorts will have varied investment requirements as they approach retirement, which will allow the scheme to shift assets from fund to fund.
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