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(From European Pensions & Investments News)
Byline: Chris Newlands
Speak to any enhanced index manager and they will tell you that more and more of their new business wins are coming from investors who have had bad experiences with active management. But they will also tell you that considerable sums of money are flowing into their business from institutional investors looking to add more 'juice' to their passive investments.
But for whatever reason, pension fund investors are turning to enhanced indexation, and the figures show that they are doing so in significant numbers.
Indeed, according to a survey of the top 200 US defined benefit schemes, allocations to enhanced indexation increased by almost 30 per cent to $214bn over the 12 months to September last year, while allocations among defined contribution schemes increased by more than 16 per cent.
In Europe, however, the take-up has been much slower, although this does not unduly concern Simon Rowe, senior investment manager on State Street Global…