Xerox hands SSGA e224m enhanced brief
The E22bn UK pension fund of document company Xerox has appointed State Street Global Advisors to run a £150m(E224 m) global enhanced indexing equity mandate.
Enhanced indexing as a strategy has become increasingly popular with pension funds over the last 12 to 18 months. The low risk strategy aims to outperform by 1%, which when market returns were of 20% did not seem to add value, but in the current environment a move from say 4% to 5% seems much more attractive.
Kanesh Lakhani, marketing director at SSGA, explained: “Enhanced indexation is a highly risk-controlled approach that delivers the benefits of both indexation and active management. It is a strategy we have implemented for nine years.
“The mandate will not take country, sector or industry positions. Individual stocks are selected through a process of valuation and growth measures.”
Commenting on the appointment, Paul Hopkins, head of pensions at Xerox, said: “We have an innovative approach to the management of our pension fund and are convinced that SSGA’s enhanced approach will suit our long term investment strategy.”
In November, SSGA said it was seeing a lot of interest from European institutions in its enhanced index funds, adding that it had around $12bn under management in enhanced index funds, up from $2bn a year before.
SSGA manages $763bn in investment programmes and portfolios for institutional and individual investors.