NEST has awarded two new emerging market mandates to HSBC Global Asset Management (UK) Limited and Northern Trust Asset Management to provide members with enhanced access to global growth opportunities.
These two funds represent the eighth and ninth underlying building blocks used in NEST’s suite of default funds, the NEST Retirement Date Funds. The two new building block funds are:
• HSBC Global Investment Funds (GIF) Economic Scale Index GEM Equity Fund
• The Northern Trust Emerging Markets Custom ESG Equity Index Fund
NEST members will be exposed to both of these funds through a blended approach which is designed to provide a superior risk return profile for members at a low cost.
Mark Fawcett, NEST’s chief investment officer, says:
‘We want to capitalise on growth and rewarded risk no matter where it is in the world and these emerging market mandates give us greater control of our exposure to this important asset class. These two new mandates represent an exciting development for NEST and as pure emerging market building blocks they allow us to further refine our approach to managing risk and delivering on our investment objectives by enhancing the global diversification of our portfolios.
‘This is our first exposure to alternative indexing and reflects two of NEST’s investment beliefs that both indexed management, where available, is generally more efficient than active management and that integrating valuation considerations into the investment process can enhance our long-term performance.’
Wayne Bowers, head of Northern Trust Asset Management, EMEA and APAC says:
‘We are delighted to be working with NEST to offer their members our innovative Emerging Markets Custom ESG Equity Index Fund. Not only does the fund offer access to emerging markets with the transparency and cost efficiency of an index fund, but it integrates a norm and sector based screening, in addition to a governance filter for state-owned enterprises.’
Stuart White, Head of Institutional UK at HSBC Global Asset Management commented:
‘The HSBC GIF Economic Scale Index GEM Equity Fund will not only provide investors with access to the exciting growth opportunities that exist in emerging markets, but we also believe our alternative indexation approach, weighting companies based on their economic footprint rather than market capitalisation, will represent the evolving shape of the emerging market economies over time.
‘HSBC Global Asset Management is delighted that NEST has recognised the value of our proprietary emerging markets economic scale index and our expertise in passive management, having also awarded us a Shariah Global Equity Index mandate in 2011. We look forward to further developing our investment partnership with NEST.’
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