Charge cap reshaping diversified growth fund landscape

first_imgSource: Spence Johnson“This is having significant implications for investment managers in DC, since most cost savings are being realised through the investment rather than the administration segment. In many cases, funds will not be considered unless they can fit within the charge cap after accounting for the administration costs.”The UK government brought in the 75bps charge cap in April 2015. It applies chiefly to default DC arrangements used for auto-enrolment.Some smaller DC schemes are struggling to reduce costs below the charge cap, however.Spence Johnson reported that schemes with fewer than 100 members were, on average, still being charged more than 75bps at the end of 2015. In part this was down to employers not being able to shoulder costs, as is the case with larger schemes.Elsewhere in its report, Spence Johnson predicted that the DGF market would grow to £289bn by 2020. The estimated 11% annual rate of asset growth is lower than in recent years, however, due to maturing defined benefit schemes and a reduction in inflows from non-UK clients.In the UK, the growth will be driven primarily by DC and auto-enrolment, Spence Johnson said. In particular, the next few years will see employee and employer minimum contributions rise from a combined 2% of salary to 8%. The UK’s charge cap for defined contribution (DC) schemes triggered outflows from some diversified growth funds (DGFs) in 2015 and 2016, according to Spence Johnson.A report by the consultancy firm estimated that more than £1bn (€1.2bn) had exited DGFs with annual charges between 70 and 79 basis points in the 18 months to the end of June 2016.In total, at the end of the second quarter of last year there was £9.3bn invested in DGFs with an annual charge of less than 40bps. This followed inflows of £3.7bn in the same 18-month period.Despite this significant shift, Spence Johnson estimated that almost £4bn was still invested in the 70-79bps range, and more than £400m was still in more expensive products. Spence Johnson’s report said: “Many schemes have reduced costs by more than what is necessary in order to allow themselves a buffer, and also prepare themselves for any potential future further reduction in the charge cap.#*#*Show Fullscreen*#*#last_img read more

Nigeria’s Abiola Dauda Joins Greek Side, Atromitos

first_imgNigeria’s Abiola Dauda is now a player of Atromitos of Greece, having left Vitesse Arnhem as a free agent.While with the Dutch based outfit, the forward was on target nine times with four assists from 28 games – before he was loaned to Scottish side Heart of Midlothian.“It was generally known that Abiola could already look out for some time for a new club, we are happy for him that he found the new challenge,” said Vitesse technical director, Mohammed Allach.Dauda has been handed jersey no. 7 and is expected to make his debut for Georgios Korakakis’s men against Panionios on Sunday.The Peristeri Stadium outfit are seventh on the Greek Super League log with 21 points from 14 games.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more