Mark McNulty, head of UK institutional at the fund manager, said SSGA introduced the ‘sub-funds’ to make ETFs particularly accessible to smaller pension schemes, which would otherwise required to set up both a direct brokerage account and a direct custodian account to invest in such a vehicle.
He said: “We see this development as an important and necessary step for small and medium-sized UK pension funds. They can now make long-term investment allocations to a broader range of investment markets, including specialty assets, such as emerging market debt and quality income tilted equities.”
Smaller schemes can now invest in the ETFs through the managed pension fund wrapper, which is a limited liability insurance company.
The seven funds now available to pension investors include an emerging markets corporate bond, an emerging markets dividend index and three dividend ‘aristocrats’ index funds based in the eurozone, the US and the UK.
Adviser View
Tom Binstead, director of employee benefits at Gloucestershire-based Bank House Corporate, said: “Choice is very important and ETFs will increasingly become the norm with the spread of platforms, although they are never going to be a mainstream choice due to their complexity.”
Key figures:
$2.22 trillion (£1.79 trillion) - the global level of assets in ETFs and ETPs (exchange traded products) in September (source: ETFGI)
$35bn (£21.96bn) - total sector inflows in September
$20bn (£12.54bn) - how much ETF inflows fell from September 2012
