Schroders said the product would be sold to institutions that did not have their own fund of fund capabilities, according to Reuters. The product could be sold under the institutions’ own brand – or the Schroder or Standard & Poor’s brand – to clients.
Standard & Poor’s will conduct fund research and recommend funds, while Schroders will set the asset allocation, construct the portfolios, and monitor risk and performance.
Funds of funds blend asset management products from a number of different providers into a single portfolio, with an aim toward providing superior returns with reduced risk.
The move to offer fund of funds is part of an ongoing restructuring under new chief executive Michael Dobson, brought in at the end of last year to turn the firm’s fortunes around. Dobson plans to refocus the firm on its core competency of active, stock picking funds and high margin areas like private client wealth management. Last month, the firm launched a fund of hedge funds aimed at wealthy private investors.
Last week Schroders sold Schroder Pensions Limited, its DC administration arm, to the Alexander Forbes Group, so that it can focus on its core active, fund management business. As part of this transaction, Schroder Hermes Limited, a company related to Schroder Pensions Limited, which provides passive fund management services, was sold to Hermes Pensions Management Limited.