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Defined benefit (DB) pension schemes run by FTSE 100 employers will completely die out within the next decade if the current rate of closure continues, according to Towers Watson.
It would be fair to say the marriage between UK pension schemes and exchange traded funds (ETFs) has had a shaky start. It seems to me, rather than having entered the honeymoon period and then into happily-wedded bliss, their relationship never really started and so UK pension funds and ETFs have barely even consummated things, let alone moved beyond that.
The popularity of diversified growth funds (DGFs) in institutional investment portfolios has soared in recent years. As investors continue to strive for relatively consistent returns through flexible investment in a range of traditional and/ or alternative return sources, there is increasing recognition that DGFs are also capable of serving the role that hedge funds have traditionally filled in portfolios. For advisers and investors, the lure of cheaper fees, greater simplicity and improved transparency can render DGFs more appetising than investing in hedge funds. However, will increasing interest in DGFs eventually result in the downfall of hedge funds?