Carmignac has launched new share classes of its Carmignac Portfolio Patrimoine fund, offering monthly dividend payments in order to serve investors seeking regular income in retirement.
The fund aims to pay out dividends of 5 per cent per annum, distributed to investors on a monthly basis.
It will adopt the same approach as Carmignac’s flagship fund, Carmignac Patrimoine – consisting of flexible management underpinned by international equities, international bonds and currencies performance drivers, with no restrictions in terms of region, sector or market cap size.
Carmignac Patrimoine is managed by the company’s founder Edouard Carmignac, who is responsible for equities, and Rose Ouahba in bonds. It has generated an annualised performance of 9 per cent since its inception in 1989 according to the provider.
In February, Carmignac announced that emerging equity fund managers Simon Pickard and Edward Cole will be leaving the company for different personal reasons.
Xavier Hovasse and David Park, who already worked for the company, were appointed as fund managers of the Carmignac Emergents fund as well as running the Carmignac Emerging Discovery fund.
Provider view
Didier Saint Georges, managing director and member of the investment committee at Carmignac, said: “Over the years Carmignac has earned a reputation as an investment house that can be trusted to give savers reliable long-term investment products. Annualised returns of 9 per cent over 25 years combined with minimising value drawdown in times of market turbulence have been just what savers in our flagship fund are looking for as they contribute to their pensions.
“We have now gone a step further and launched a share class that allows those same savers to use the product as they enjoy the fruits of their investment, by yielding up to 5 per cent a year paid monthly.”
Adviser view
Peter Matthew, chartered and certified financial planner at Jacksons Wealth Management, based in Cornwall, said: “There seems to be a hunger for natural income. I have found that a few more people are asking for regular monthly income so there is certainly a demand for it. With interest rates as low as they are now, and with low annuity rates, I think there could be a trend of funds offering monthly income.
“The usual caveat applies with this investment opportunity as it does with every fund investment. The investor should be wary in their pursuit for high income, and know what it is under the bonnet that is generating the income they desire.”
Charges
There is a 0.85 per cent fee fixed annual management charge and variable management fee of 10 per cent of the outperformance of the fund.
Verdict
The new pension freedoms have paved the way for opportunities in the investment sector.
With the stipulation for those at retirement to convert their pension pot into the annuity scrapped as a result of the changes to pensions, announced in the 2014 Budget, and with annuity rates remaining relatively low, investors have begun to seek alternative means for regular income.
We have already seen providers tailoring their services to attract new customers at retirement, including a low-volatility funds, which offers a degree of safety to investment – though the value of an investment is not guaranteed.
Investors seeking to maximise their income should take a cautious approach to new propositions and find out how their income is being generated.
