UK investors expected to increase DGF use in future

June, 2014 Print



UK pension schemes will increase their use of diversified growth funds (DGFs) according to AXA Investment Managers. Its view is based on a recent survey of over 150 consultants and pension funds on DGFs, which aim to use a range of assets to produce growth with low volatility.

The survey found that nearly half of defined benefit schemes use more than one DGF; using more than one to reduce risk, diversify manager exposure and to give access to more asset classes. Two-thirds of DC schemes with over £250 million in assets held two or more DGFs, again to reduce risk and increase manager exposure. And over two-thirds of consultants recommend that funds use more than one DGF.

AXA Investment Managers head of UK institutional, Maddi Forrester, commented: “De-risking is the primary objective for the majority of UK schemes, and trustees and pension managers are always looking for new methods of diversifying between asset classes with a value for money product, which we believe the ‘next generation’ DGFs offer.”


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