Scottish Widows launches active pension portfolios

Nicola Brittain reports...

Scottish Widows has launched a new range of actively-managed portfolios branded the Premier Pension Portfolios.

The range is in addition to its existing pension default range and offers an alternative to its primarily passive approach. The new funds are risk-based, multi-asset and available to group and individual pension customers.

They are distributed as stand-alone investments or components of lifestyling options, which will be offered to employees in group pensions as well as individual pension customers.

The range combines external fund managers and Scottish Widows’ own investment specialists to invest across a range of asset classes and select the component funds.

By accessing a wider range of asset classes, specialised investment strategies and an element of active management, the Premier funds target annual returns 0.75% higher (net of fees) than the equivalent default portfolios over rolling three-year time periods for broadly the same level of investment risk, the firm said.

The wider range includes smart beta equity strategies, absolute return, property, global credit and a tactical asset allocation overlay.

The Scottish Widows Asset Allocation team said it had assessed suitable strategies and worked closely with quantitative modelling specialists Moody’s Analytics to help refine the choice and decide the long-term asset mix of each Premier Pension Portfolio fund.

They carried out comprehensive testing of the portfolios under different market conditions to challenge and stress-test the proposals, they said.