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IPE special report May 2018

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NEST to add emerging market equities to investments for first time

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  • Botafogo Bay, Brazil

The UK’s National Employment Savings Trust (NEST) is adding emerging market (EM) equities to its investments as dedicated funds for the first time, and has put out a tender in search of managers to run two different strategies within the asset class.

The workplace pension scheme, established as part of the country’s auto-enrolment reforms, said it was looking to procure a global EM equity index-tracking fund and an alternative index global EM fund.

Mark Fawcett, CIO at NEST, said: “These emerging markets mandates will allow us to further access an asset class with the potential to deliver good growth for our members, as well as greater scope for diversification.”

For the global EM equity index-tracking fund, NEST said it would consider any established, well-constructed EM equity index, including funds that applied an environmental, social and governance screen.

The aim with the alternative index global EM fund search is to find a fund with a value style bias or tilt, NEST said.

These are the first EM mandates the trust has put out, a spokeswoman for NEST said, but added that NEST does already have some exposure to the asset class through one of its pooled funds – a Blackrock Aquila Life fund.

The EM investment funds will be used as building blocks in the default NEST retirement date funds and in other fund choices as appropriate, the trust said.

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