Kames promotes income fund to advisers

Kames promotes income fund to advisers

Kames Capital has begun marketing one of its latest funds to IFAs, claiming it will be a hit following April’s pension reforms.

Steve Kenny, head of sales at Kames Capital, said the company’s Diversified Income Fund, which has recently achieved its one-year track record, would aim to achieve 5 per cent income plus a modest capital upside.

He said: “When people retire they go from an environment which is fairly safe to one where they are wondering what their income is.

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“It is variability that causes people to be stressed and that is why IFAs are looking at this sort of fund.”

“Twelve months hence this type of fund will take a huge amount of flow.”

But he stressed that the 5 per cent income was a target, not a guarantee.

He said: “We will hold back income if we think there will be shortfalls in the future, and we are trying to smooth it so it does not have a mountain range.

“But it is hugely important clients understand that while we are looking to achieve 5 per cent, it is a target not a guarantee.”

The fund is made up of a wide-range of different asset classes including investment grade bonds, high-yield bonds, UK equity income and global equity income.

Adviser view

Colin Parkin, managing director of Lincoln-based Ample Financial Planning, said: “If I were to use a fund for retirement income I would want to know what risk rating it was and where it was making its investments.

“Looking at this fund overall, it has performed alright since launch, but looking into the future it is hard to know.”