Scottish Life, the pensions specialist arm of the Royal London Group, has announced that from 14 November 2011, the underlying investment within the Scottish Life UK Mid Cap Specialist Pension Fund will change from Schroder UK Mid 250 to Franklin UK Mid Cap Fund*.
In addition, from the same date, the underlying investment within the Scottish Life US Core Plus Pension Fund will change from Investec American to Fidelity American. These changes reflect Scottish Life's commitment to strong and effective investment governance.
The Scottish Life UK Mid Cap Specialist and US Core Plus Pension Funds are part of a group of externally managed equity funds categorised by sector and by risk relative to a benchmark.
Lorna Blyth, Investment Marketing Manager at Scottish Life, commented:
"We take a proactive role in the governance of our investment fund range, with regular reviews of the investment objectives, performance and benchmarks, and we make changes when necessary.
"We have taken the decision to replace the Schroder UK Mid 250 Fund following a sustained period of underperformance and concern that the size of the underlying fund had increased to such an extent that it was likely to have a negative impact on performance relative to its market sector. The Investec American Fund has also had a sustained period of underperformance and in addition has become more volatile relative to its benchmark. We therefore feel that replacing the fund is the most appropriate action to ensure the risk profile is maintained. Both the Franklin UK Mid Cap Fund and the Fidelity American Fund have long track records of strong performance and we believe that in each case the manager's style and process are better suited to delivering consistent performance in varying market conditions.
"We've designed the process of replacing an underlying fund to be a seamless transition. And we're communicating the changes to advisers and policyholders well in advance so they can be confident that we continually monitor the fund range and make adjustments when we feel it is necessary."
* This fund was previously called the Rensburg UK Mid Cap Growth Trust and will be renamed the Franklin UK Mid Cap Fund with effect from 17 October 2011.
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