Scotiabank Peru is boosting its international product range with four locally-domiciled funds of funds made up of vehicles from global asset managers.
The range features two equity funds and two debt funds. Each is set to invest in three vehicles run by global managers, which will be offered to the firm's wealth management clients, said Jonathan Romero, a senior analyst in charge of structuring the funds.
In September, Scotiabank Peru launched the first of its funds of funds, a US equity vehicle.
Scotiabank has invested 80% of the fund assets in three vehicles:
- Schroders US Small and Mid-Cap Equity, run by Citywire + rated Jenny Jones
- Robeco QI US Conservative Equities, managed by Citywire + rated managers Jan Sytze Mosselaar, Maarten Polfliet, Arlette van Ditshuizen and Pim van Vliet
- AllianceBernstein American Growth Portfolio, run by Citywire-A rated managers Frank Caruso and Vincent DuPont; Citywire + rated John Fogarty; and Karen Sesin
The other 20% was set aside for ETFs and cash to manage volatility.
Romero added that the firm expected to launch the three other funds before the end of November. He still working on the individual funds but has selected the managers Scotiabank will be working with.
The European equities vehicle will invest in funds by BlackRock, Investec and Man GLG.
Meanwhile, the high yield fund will invest in vehicles by AQR Capital Management, Aviva Investors and Neuberger Berman, and the investment grade fund in Vanguard, Robeco and Neuberger Berman.
With the launches, Scotiabank Peru has also started offering open architecture to its wealth management clients, Romero said. The firm’s previous range featured funds of funds, though many were invested in vehicles run by its Toronto-based parent company.
In addition, Scotiabank set to offer its wealth management clients international exposure at attractive tax rates.
‘We have demand from clients who want to invest internationally but couldn’t for tax reasons because capital gains from foreign investments generate a 30% tax,’ Romero said. ‘But [capital gains from local investments] are 5%. If we have a local fund with exposure to the best international managers that’s good for clients.’
In addition, the firm planned the fund launches due to an upcoming tax amnesty that would allow Peruvians to pay a 10% rate on money earned abroad if it’s declared and 7% if it’s repatriated, Romero said.
The firm, which Romero said ran $1.7 billion in wealth management assets, plans to offer the funds to its private banking and ultra-high net worth clients.