Zurich has added equity exposure to its range of investment funds with the launch of the Zurich Investments Global Equity Income Fund in partnership with PM Capital.
The move follows growing demand for equity exposure and income-generating investments from advisers, while investor risk appetite remains subdued.
The new fund gives exposure to growth opportunities, but also employs strategies to reduce risk for a good level of income.
"We're very aware that there is a demographic tsunami happening. Advisers' clients are moving to transition to retirement [and] are looking for levels of capital protection and income," Zurich head of key accounts and research investments Tim Meggitt told InvestorDaily.
"At the same time they do also need growth, so they do need to be invested in equity markets."
In a recent survey, Zurich noted a growing demand for equity exposure but low expectations for overall growth in local markets.
About 70 per cent of advisers indicated they would be moving clients' cash to equities in the next six to 12 months, with 25 per cent favouring international equities.
Around 45 per cent were expecting the Australian share market to provide single-digit returns over the next 12 months. Only 9 per cent were expecting double-digit growth.
PM Capital's investment approach is what attracted Zurich into the partnership.
"It was fortuitous therefore that they were managing a relatively new fund that fitted our needs perfectly. So rather than developing a new fund, we offered to take over as the responsible entity for that fund," Zurich general manager of retail life and investments Philip Kewin said.
Meggitt said PM Capital's focus on risk management and downside protection was also key to the partnership.
The Zurich Investments Global Equity Income Fund is comprised of a portfolio of 40 income-producing international stocks across a range of sectors and geographies. The manager uses options and currency strategies to help reduce downside risk.
