Skandia has brought two passively managed funds to the retail market.
Skandia UK Index and Skandia Gilt existed as segregated mandates, but this is the first time they have been available to retail investors. The funds launched on June 26.
UK Index aims to track the performance of the FTSE All-Share, with its largest holdings, including AstraZeneca, BP, HSBC and Royal Dutch Shell. It has been run by Barclays Global Investors since 2004.
The Gilt fund invests primarily in British gilts, although it can also hold overseas bonds, and all currency exposure is hedged back to sterling. Panayotis Ferenedinos of BlackRock has managed the Gilt fund since 2002.
Rob Williams, business development director at Skandia Investment Group (SIG) has seen growing demand for this type of passive fund among advisers, given current conditions.
The move is the start of a drive to expand the group’s passive fund offering. It will be reviewing segregated mandates run by other managers to determine whether they are suitable for the retail space, he adds.
Both funds will be available through Skandia’s Investment Solutions platform and its life and pension fund range, as well as directly from Skandia Investment Management Limited (SIML). The minimum investment for both funds is £1,000
For the Gilt fund, the annual management charge (AMC) is 0.6%, the initial charge is 5% and the total expense ratio (TER) is estimated at 0.72%.
The UK Index fund attracts an AMC of 0.4%, an initial charge of 0.4% and an estimated TER of 0.47%.