Personal Pension  

Blackrock launches charge cap beating multi-asset fund

Blackrock launches charge cap beating multi-asset fund

Blackrock has launched a new fund to help defined contribution schemes construct default solutions that comply with the new regulations around charge caps.

The Dynamic Allocation Fund has an annual management charge of 0.42 per cent and an ongoing charge of 0.50 per cent (the AMC plus other charges).

It invests in a range of asset classes, including developed market equities, commodities, emerging market debt and corporate bonds, using low-cost exposures as building blocks within its dynamic asset allocation strategy.

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The strategy is based on the firm’s Dynamic Diversified Growth Fund, launched in 2001 and managed by Adam Ryan, supported by the diversified strategies team which manages £18bn in assets under management globally.

It aims to deliver a total return over the medium to long-term, with less volatility than a standalone investment in equities through various protection strategies, such as equity market hedging.

Tony Stenning, head of UK retail at Blackrock, said that DC members need innovative investment strategies to help them plan and live comfortably in their later years.

“The Blackrock Dynamic Allocation Fund is designed for this purpose. It is a low-cost, actively-managed multi-asset fund that aims to grow individuals’ hard-earned nest eggs, while taking out some of the investment volatility and therefore delivering a smoother journey.”

Earlier this year, Rob Thorpe, head of UK sales for retail and wholesale at F&C Investments, predicted that the pension changes could mean that advisers will seek products that deliver income while keeping capital invested.

In March, the Department for Work and Pensions published plans to extend a proposed exemption from the 0.75 per cent auto-enrolment charge cap applying to certain additional voluntary contributions to money purchase pensions.

The government stated that since laying out charge cap regulations it has been made aware that an exclusion from the exemption, in cases where an arrangement receiving AVCs is used to meet the basic auto-enrolment ‘duties’, does not “function as intended”.

peter.walker@ft.com