InvestmentsSep 15 2014

L&G launches retirement income multi-asset fund

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Legal and General Investment Management has launched a new fund aimed at investors looking to draw down income from their retirement pot, something expected to become increasingly popular in the wake of next April’s pension tax reforms.

Martin Dietz will act as lead manager on the Lgim Retirement Income Multi-Asset fund, which will be managed by the firm’s asset allocation team.

It is broadly diversified across a range of asset classes and regions, with asset allocation dynamically adjusted to adapt to changing market environments.

The fund “aims to provide long-term investment growth up to and during retirement, and to facilitate the drawdown of retirement income.”

It targets a return of the Bank of England base rate, currently 0.5 per cent, plus 3.5 per cent over a ‘full market cycle’ of between five and seven years. It aims to achieve this target with less than 50 per cent of developed market equity volatility.

Lgim said it implements the drawdown facility through redeeming fund units to help reduce any disinvestment costs for its investors through a focus on cash flow management.

Members are able draw down monies according to their own preferred timeframe, subject to their individual scheme rules.

Mr Dietz said:“The Budget changes earlier this year were designed to ensure retirees have more control over their money and to provide them with a wider range of income generating options upon retirement.

“The launch of our Retirement Income Multi-Asset fund is in response to this change and reflects the growing demand from investors for more choice about what they do with their pensions.”