Nest has signaled its intention to add actively-managed commodities to its default funds arguing the asset class is attractively priced in historic terms.
Issuing an invitation for tenders issued today, Nest says it plans add this new mandate to the range of asset classes in its Nest Retirement Date Funds and also into some of its alternative fund choices.
Nest says it is looking for a fund manager that can navigate the risks and opportunities of the commodities markets, including environmental, social and governance risks. It is looking for a blended fund that includes commodity related equities and will says it will consider seeding a new pooled fund if necessary.
Nest deputy chief investment officer John St Hill says: “As our assets under management grow, we’re able to explore new ways to diversify members’ pots and give them access to different opportunities. We expect the return on our commodities investment to have a moderate correlation with equity and fixed income markets and we also think that it will provide some inflation protection.
“Commodities look attractive relative to their long term historic prices. As the world’s population grows and incomes in the developing world rise, we expect increasing demand for commodities. We want our members to benefit from these long-term trends.
“We’re looking to build a constructive, long-term relationship with a fund manager that can demonstrate its ability to support that goal.”
Responses to the tender can be submitted via Nest’s e-tendering portal at https://nesttenders.bravosolution.co.uk by 12.00 noon, 26th February 2018.