Barclays offering two fund pooling vehicles
Barclays Global Investors is offering two pension fund pooling vehicles (PFPVs) to give institutiona...
Barclays Global Investors is offering two pension fund pooling vehicles (PFPVs) to give institutional investors access to pooled investments in US equities.
The two funds are the Aquila US Equity PFPV and the Ascent US Equity PFPV, which offer indexed and quantitative active equity exposure respectively.
They are designed to be treated by the UK and US authorities as tax transparent for exempt-approved pension schemes, making them eligible for full tax relief on US dividend income.
Historically, pension schemes have paid withholding tax on US equities at 15%. When the UK/US Tax Treaty came into effect last year, it allowed full US dividend tax relief on direct holdings of US equities by exempt-approved pension schemes. However, this provision did not extend to indirect holdings in US equities through most pooled funds.
BGI currently manages US equities totaling £7.9bn in index funds and £3.1bn in active vehicles for its UK pension scheme clients.
Client director at BGI Iain Simpson said: "The situation was unfair for institutions investing indirectly in US equities through pooled funds and the establishment of PFPVs for our indexed and active equity products addresses this."
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