BGI creates fund pooling vehicles for US equities
Asset management group Barclays Global Investors (BGI) says that it has set up two pension fund pooling vehicles (PFPVs) that have the objective of providing a “tax-efficient solution to pooled investments in US equities”.
“The status quo was unfair for institutions investing indirectly in US equities through pooled funds,” said BGI client director Iain Simpson.
He added: “The establishment of PFPVs for both our indexed and active equity products addresses this inequitable situation head-on and we are sure that they will be welcomed by investors.”
The two new BGI funds are the Aquila US Equity PFPV and the Ascent US Equity PFPV, which respectively offer exposure to indexed and quantitative active equities.
BGI currently has some £7.9bn (E11.3 bn) in US equities under management.
The Aquila and Ascent funds are designed to be treated by the UK and US authorities as tax transparent for exempt approved pension schemes, therefore making them eligible for full tax relief on US dividend income.
BGI said that a new UK/US tax treaty means that UK schemes can claim full US tax relief on dividend income from direct US equity investments.
However, it does not cover indirect investments through pooled life funds, open-ended investment companies or unit trusts.