Tyndall Investments is set to launch a share income fund that will provide retirees with immediate income, but also with the potential for long-term growth.

The Tyndall Australian Share Income Fund is designed to return two per cent per year more than the dividend yield of the S&P/ASX200 Accumulation Index, enhanced by franking credits, over a rolling five-year period.

Becoming available from November 18, the fund also aims to provide long-term capital growth by investing in companies it regards as undervalued.

"The ageing population creates increasing demand for products offering income, as people move from the wealth accumulation to the pension phase," Suncorp/Tyndall Investment Management managing director Brett Himbury said.

"Recent retirees, who need immediate income, realise they also need capital growth to maintain the spending power of their capital in future years."
 
The fund is a useful vehicle for those investors who feel the time could be right for cautious steps back into the equity market, Himbury said.

"We recognise that markets are down and sentiment is down... but if you are a long-term investor you would have to say there are great income streams available."

The retail fund has a minimum investment of $50,000 and will be co-managed by Tyndall's deputy head of Australian equities, Warwick Cumming. 

The stock selection criteria for the fund will be based on seeking intrinsic value through research. "Regardless of the direction of the market, there are always some stocks that represent better value than others," Cumming said.