Brisbane-based Pentalpha Investment Management has established a retail class of unit in its Income for Life fund, designed to be a more secure and higher-yielding alternative to cash, term deposits and lower-risk interest rate securities.
The fund targets 6 per cent plus per annum, with Pentalpha saying that it was made for investors seeking regular income distribution, the protection of their capital and measured participation in long-term equity growth to mitigate the effects of inflation.
Pentalpha said that the new offering should be appealing to retirees, charities, trusts, foundations and family offices, including those transitioning into retirement.
Pentalpha executive chairman and head of investments Denis Donohue said that one of the biggest challenges retirees face in framing their future income streams is balancing risk and return.
“Pentalpha produces a ‘risk-managed’ target return rather than a performance outcome that is ‘relative to benchmark’ or otherwise independent of the total return,” he said.
“In contrast to many market-linked equity income strategies, every component of Pentalpha’s total return is explicitly managed.
“At the end of the day, I manage the fund as if it were my own, which is why I co-invest.”
Mr Donohue added that the strategy delivers certainty by ensuring a defensive line of protection is set under every investment in the portfolio.
“This safety net is always in place, with the cost of protection funded by forgoing a proportion of potential share price appreciation, but only that proportion above an agreed level not required to deliver within our absolute return target range,” he said.
“This is the key differentiator of the fund.”
The fund is now available via platforms including Macquarie, HUB24, Netwealth, OneVue and PowerWrap.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah spent her career working in business-to-business media, including print and online, as well as cutting her teeth on current affairs programs for community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.
You can contact her on [email protected].
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