Axa Australia is targeting retirees with a new multi-manager fund.
Axa Australia has launched a new multi-manager fund that aims to generate a high income stream for retirees.
The product, which is called the Axa Income Generator, will invest in various asset classes, including Australian and international equities, listed property, infrastructure, fixed interest, inflation-linked bonds and hybrids.
In contrast to a pension fund, the allocation to equities in the Income Generator is relatively modest, with about 30 per cent in Australian equities and 5 per cent in international equities, and a focus on stocks with high dividend yields.
"In retirement, all the focus is on income, not on wealth [accumulation]," ipac chief investment officer Jeff Rogers said.
Most investment funds construct their portfolio to generate the highest total return, but this might not always be the best option for retirees who are dependent on an income stream, Rogers said.
He expected market volatility to increase in the coming years and said retirees should adjust their investments accordingly.
"There will be more bubbles, more noisiness along the way. The question is how to deal with that in retirement," Rogers said.
Ipac is responsible for the selection of fund managers in the portfolio, which includes Legg Mason Global Asset Management and Ankura Capital for Australian equities, Epoch for international shares, and Macquarie for fixed interest.
Rogers estimated the fund will generate an income of about 5.7 per cent after fees and including franking credits for the financial year ending at 30 June 2011.
This return excludes capital gains on assets in the portfolio, which Rogers estimates at about 2.5 per cent over the period.
Because the product is constructed specifically to deliver a high income stream to investors it cannot be measured against any benchmark, and therefore will not be available with the North capital guarantee, Rogers said.
The Axa North platform gives access to 134 funds, but only 46 of those are available with a capital guarantee.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
Home delivered!
Daily news, weekday mornings
Get the day's news delivered direct to your inbox. Register here (it's free!) and choose 'yes' to receive the InvestorDaily newsletter.
