Specialist funds management firm Magellan Financial Group has launched retirement income-focused fund FuturePay.
The fund offered a monthly distribution of 2.03 cents per unit, which would be adjusted quarterly based on inflation.
It would invest using the same strategy as other Magellan funds, with a focus on high-quality, low volatility companies listed on exchanges around the world which delivered attractive, risk-adjusted returns over the medium to long-term.
The fund had only two access points, either via the traditional application and redemption process or via stock exchange Chi-X, but the firm hoped to have it added to platforms in the future.
Managed by Paddy McCrudden, Magellan head of retirement solutions and data science, the expected annual yield was 4.24%, with a management fee of 1% pa and no performance fee.
Brett Cairns, Magellan chief executive, said being able to offer this on an exchange was important for the fund.
“When you sell something on exchange, you’re transferring the unit to someone and not redeeming it, so those reserves and the benefit of those reserves carries with it [to the next holder],” Cairns said.
“What we set out to achieve was a product that people could consider within retirement, but it does have uses outside of retirement.
“The idea is to try and build up a predictable known income that has a growth element underneath it as well, that brings in some of these risk management characteristics, that’s all done in one product.”
The firm said the fund was in the “queue” to be rated by most rating houses, as they understood the importance for advisers who selected funds from approved product lists.