AJ Bell launches four income portfolios

AJ Bell launches four income portfolios

AJ Bell has launched four new income-focused multi-asset funds aimed at providing a specific level of income. 

The funds are within its managed portfolio service and have been designed to offer a specific level of yield with either capital or inflation protection built in.

Kevin Doran, chief investment officer and managing director of AJ Bell Investments, said: "The search for income remains a key investment priority for many investors, particularly in the extended low interest rate environment and with many more people remaining invested in retirement and utilising the new pension freedoms.

"Advisers have told us that an income option in the MPS would suit a significant number of their clients and we are pleased to be able to launch these four new portfolios for them. 

"The annual management charge of 0.15 per cent plus VAT makes the service one of the best value in the market and we have made it as easy as possible for advisers to use by mapping it to the existing risk profiling tools that many of them already utilise within their business."

The Income 1 fund has a target yield of 4 per cent and aims to offer long-term capital protection through defensive asset allocation.

The active portfolio has an underlying ongoing charge figure (OCF) of 0.66 per cent, with the passive version having an OCF of 0.34 per cent.

The Income 2 fund also carries a target yield of 4 per cent, but is designed to provide investors with an inflation-proofed portfolio.

It will have no exposure to fixed income, so is aimed at investors wary of the potential impact of rising interest rates on bonds.

The passive portfolio has an underlying OCF of 0.35 per cent with its active portfolio fund having an OCF of 0.73 per cent.

The active strategies typically will hold between 10 and 20 funds, with the passive approach holding five to 10 funds.

All four funds will be sold exclusively to advisers through the AJ Bell Investcentre platform.

The firm’s MPS range now includes 16 portfolios.

Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, said:  "It appears to be a decent offering and it will be interesting to see the underlying holdings of those portfolios to see what the investors are getting for their money, if they use funds from a small selection of managers or the whole market, and whether or not other types of in investments are used too such as direct equities or ETFs.

"The fee of 0.15 per cent AMC is quite low so it can be attractive to firms who don’t want to or don’t have the time and resources to build their own portfolios for clients. 

“Having said this, it is worth noting that there are some platforms that offer their MPS range for free to advisers, for instance Old Mutual Wealth.

"Since we build our own bespoke portfolios for clients, this offering alone would not attract us to using AJ Bell."