The SLI product allows the investor to make a single investment in a pooled bond fund of below -AAA credit. But the allocation will be invested in a range of underlying funds, covering various levels of credit quality and duration. The mix of funds will be tailored to match the particular liabilities of the investors.
Christopher Nichols, investment actuary at Standard Life Investments, said: “It’s like buying shares in a department store. You get a mix of profits from all the departments, but you might only want the profits from ladies wear and haberdashery. Our investors are able to pick and choose which departments to invest in.” The fund allows investors with insufficient funds for segregated mandates access to a more bespoke approach.
Merrill Lynch has launched a sterling and a dollar fund. Each offers investors a six-month investment horizon, which is slightly longer than the three months offered by the average money market fund.
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