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State Street launches diversified vehicle for pension funds

22 Jan 2013

State Street Global Advisors, the asset management business of US financial services group State Street Corporation, has launched its Dynamic Diversified Fund to invest across asset classes including alternatives, commodities, real estate and infrastructure.

Market volatility has driven an increased client demand for active tactical allocation rather than the traditional approach of holding a static asset allocation, State Street said.

The fund will be part of the firm’s flagship Managed Pension Fund.

Susan Raynes, head of State Street Global Advisors for the UK, Middle East and Africa, said, “The new fund allows clients the potential to participate in rising markets and manage their asset allocation whilst attempting to limit the risk of significant drawdowns when markets fall.

“The dynamic asset allocation model is designed to deliver a smoother investment path by switching into the right asset at the right time.

“The fund also benefits from a sophisticated risk control mechanism in an effort to guard against downside risks.”

Andrew Soper, head of UK and Ireland portfolio management, added, “Financial markets have changed. Previously safe asset classes are no longer dependable, whilst historically high performing asset classes have performed poorly.

“There is broad recognition that a static asset allocation is not optimal under all market conditions. Our high conviction strategy will aim to divest completely from some asset classes if necessary or rapidly switch into assets when the time is right.”

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