Mercer intensifies its retail push

Mercer Global Investments (MGI) has launched an income fund that represents its first product purely aimed at retail investors.

“All of our other products that we offer to the retail market have really been developed with a superannuation purpose in mind. Now they do have a retail use, but they weren’t designed for retail. So that’s why this is sort of a landmark fund,” said head of MGI Australia and New Zealand Gary Burke.

The Mercer Income Plus Fund is a multi-manager product that aims to provide investors with a robust income stream by tapping into eight different asset classes, including high yield debt, fixed income, property, shares, and alternatives.

“Most of the income products that are available rely on traditional fixed income markets, corporate debt, hybrid securities, or mortgages, most of which are exposed to interest rate risk,” Burke said.

The MGI product incorporates the strategies of 17 different underlying fund managers, which Burke said provides good risk mitigation and allows the offering to invest in asset classes other income funds avoid for capital risk reasons.

“What we’re targeting is an income return of 2.5 per cent above the bank bill index consistently produced and paid monthly,” he said.

“So the target audience here are retirees, or investors that rely on investment income to finance lifestyle needs, or investments for allocated pension arrangements where, again, you have to distribute income,” Burke explained.

The Income Plus Fund will be available to investors immediately via the Mercer Wealth Solutions platform. MGI is also currently in negotiations to have the product included on all of the main industry platforms and distributed through major financial planning dealer groups.