UK DC master trust NEST is looking to capitalise on tariff-related market moves to rebalance member portfolios at attractive valuations, the fund has told IPE.
Divergence in performance between equity and bond markets in the wake of recent tariff announcements has led to asset allocations in some of its funds drifting from target weights.
The pension fund is proactively looking to capitalise on these market dislocations and the plan’s “strong and consistent positive cashflow helps with this”, NEST told IPE.
Consistently rebalancing to target weights has been shown to improve member outcomes.
However, the fund added: “Before we move any of our target weights, particularly in the current environment, we must carefully consider what has triggered the market moves and any impact to long-term trend growth, inflation, and real interest rates.
“It may take some time for us to gain confidence in the likely scenarios as the policy environment remains highly unstable.”
NEST is the largest UK workplace pension scheme by members. Close to 4 million individuals contributed to the scheme at its latest year-end, with an average of over £600m in new contributions received each month. The fund manages around £50bn (€58bn).
Acknowledging that its members will have concerns about the market volatility linked to governments’ tariff announcements, NEST has updated its website to reflect what members are reading in the news, the fund told IPE.
People’s Partnership, another UK master trust provider, also said its investment strategy was designed to navigate market volatility.
“We invest The People’s Pension for the long term in lots of companies in many geographical regions and sectors, working hard to look after our members’ savings and ensure their pension is as robust as possible,” a spokesperson said.
The stance is in line with that of pension funds on the other side of the channel, who have mostly indicated they are holding on to their long-term views.
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Pamela is IPE's UK correspondent.
Before joining IPE in May 2023, she spent five years writing about the insurance industry.
During her career so far she won awards for Most Promising Newcomer in 2020 and Best Investigative Article in 2022 from the British Insurance Brokers Association, and was also highly commended at the WTW Media Awards for Insurance Features Journalist of The Year.View full Profile
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