State Street Global Advisors (SSGA) has launched a tax-efficient passive fund for Scottish Widows, a pensions and insurance company.
Scottish Widows has invested £2 billion (€2.33 billion) in North American equities through the fund, while SSGA says it will add other strategies to the structure.
The fund is an authorised contractual scheme (ACS), which is a Ucits-regulated pooled vehicle in the UK mainly available for pension funds and defined contribution (DC) providers. The funds receive that same tax advantages as though they had invested in the underlying securities directly.
There are only a small number of funds of this kind on the market, said SSGA.
Iain McGowan, head of fund development and analysis at Scottish Widows said the insurer was “continually on the lookout for new and innovative structures”.
Nigel Aston, European head of defined contribution at SSGA, said: “As the distribution landscape for UK DC rapidly evolves, we are increasingly being asked by partners, such as life assurance company platforms, to innovate. In a rapidly evolving UK and European distribution landscape, particularly post-Brexit, the tax treatment of an investment ‘wrapper’ is equally important to the actual investment strategy within it.”
State Street already provides several investment services to Scottish Widows including global custody and fund administration.
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