Border to Coast launches £2.6 billion global multi factor equity index fund
Border to Coast Pensions Partnership has introduced its first index proposition, allowing partner funds to pool £2.6 billion in assets into a customisable strategy, significantly reducing costs.
Compared to existing solutions, the Global Multi-Factor Equity Index Fund is expected to generate substantial annual fee savings, leveraging collective scale and strong strategic partnerships.
Developed in close collaboration with partner funds, the new proposition enhances cost-efficient access to global equity strategies within the pool. It will blend stocks while targeting five key fundamental factors: Value, Momentum, Quality, Low Volatility, and Size.
Border to Coast will maintain full control over the fund’s evolution, including its decarbonisation metrics and exclusion policy. This ensures the strategy accounts for long-term financial risks associated with net zero commitments and responsible investment policies.
Launched in May with support from five partner funds, Border to Coast has appointed global investment manager BlackRock to oversee the proposition, in partnership with STOXX as the index administrator. This collaboration provides partner funds with cost-effective access to market-leading expertise in index investing, research, factor-based solutions, and product design.
Cllr Ken Dawes, Chair of Tyne and Wear Pension Fund Committee, said: “The launch of our partnership’s first index fund was a real collaborative effort, and demonstrates how Border to Coast delivers on the ambitions of pooling. We are delighted with the appointment of an expert global asset manager, overseen by a diligent team retaining ultimate control of the index to ensure it aligns with our collective Responsible Investment policies. This is a cost-effective solution which complements our existing pooled equity funds.”
Jo Kempton, Head of Lincolnshire Pension Fund, added: “Working together with the Border to Coast investment team we have developed a proposition that not only cuts fees but will also remain aligned with our investment policies. This isn’t just passive exposure to an index, it brings the best of active management together with the cost-effectiveness of index investing to provide a sophisticated solution that we wouldn’t have necessarily had access to prior to our partnership.”
Graham Long, Head of Portfolio Solutions, Border to Coast, said: “Our first index fund complements the robust platform of propositions we have designed and developed in collaboration with partner funds and further enhances the pooled global equity options we offer, in a strategy with meaningful integration of Responsible Investment principles focused on managing risk and delivering long-term value.”
The fund will seek to outperform the MSCI All Country World Index by at least 0.5% a year (net of fees) over rolling five-year periods.
