The range will be pro-actively managed using underlying FTSE4Good indices and UK gilts.
The Pensions Trust is the first adopter of the range, offering it to all of their DC employer schemes on the SmarterPensions platform. The range will also be available for all contract-based schemes as well as trusts as a default or an ethical alternative.
The Ethical Target Date Funds range will employ the same proprietary dynamic asset allocation (DAA) process as all other AllianceBernstein’s Target Date Funds. DAA is designed to smooth the ride for investors, by making short-term adjustments to the asset allocation in order to de-risk the portfolio during times of extreme market conditions. The fund manager says since inception in early 2010, this process has helped reduce volatility in client portfolios without harming returns.
Speaking at the launch of the funds today, FTSE Group environmental, social and governance director David Harris said there was no conclusive evidence either way that performance of those companies who met the FTSE4Good criteria was any better or worse than those companies not doing so.
Tim Banks, head of DC client relations at AllianceBernstein says: “This launch is further evidence that flexible Target Date Funds can be used to create bespoke strategies to meet pension providers’ individual objectives and investment beliefs. Flexible Target Date Funds adapt to the changing needs of a modern working environment and offer a robust governance framework. They provide a simpler and more flexible default strategy and we believea better way for millions of DC members to save for retirement.”
Harris says: “There is growing demand for investments that incorporate environmental, social and governance (ESG) considerations. This can be to align personal values with investment approaches, but is also because many investors expect companies that perform better on ESG criteria to be better long term investments. These new funds will also allow employers which themselves operate responsibly, to offer an aligned socially responsible option to their staff as they save for retirement. The FTSE4Good Indices have been designed to objectively measure the performance of companies that meet globally recognised ESG standards and we are proud to have been selected for this pioneering fund series.”
