Psigma Investment Management has launched a cautious income strategy to help advisers looking for opportunities arising from the pension reforms, its sales and marketing director Frank McGarry has announced.
He said: “We have designed this new fund to meet the need arising from the pensions revolution, and it should help our clients generate a healthy income in a yield-starved world.
“It is likely that the inevitable path of interest rate rises will be shallow, and our new income strategy will fulfil the growing hunger for income.”
The fund will be added to Psigma’s managed portfolio service’s four existing strategies, and modelled on the firm’s existing cautious strategy, which, according to its data, has outperformed the ARC Sterling Cautious private client indices by more than 20 per cent since its launch a decade ago.
According to Mr McGarry, the cautious income strategy will aim to deliver 2 per cent above inflation and target an annual yield of 3 per cent. It will also attempt to generate defensive returns through diversified investments with a maximum weighting in developed and emerging market equities of 30 per cent.
It has an annual management charge of 0.5 per cent, and total expense ratio would be a maximum 1.35 per cent.
The fund will be available both directly from the discretionary manager and on Transact, Ascentric, Aviva and the Fusion Platforms.
Adviser View
Gordon Bowden, director of Buckinghamshire-based Quainton Hills Financial Planning, said: “In today’s market where investors are always trying to get hold of yields at low risk and volatility, it is definitely a product that investors would be interested in.
“So this is the right type of product, although advisers are usually reluctant to recommend a new fund until it has a demonstrative track record.”
