BGI sets up US equity pension pooling vehicles
EUROPE - Barclays Global Investors says it has set up two pension fund pooling vehicles to provide 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. "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 funds are the Aquila US Equity PFPV and the Ascent US Equity PFPV, which offer indexed and quantitative active equity exposure respectively. BGI has 7.9 billion pounds in US equities under management.
They 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 - although it does not cover indirect investments through pooled life funds, open-ended investment companies or unit trusts.