When setting out on a long trip in an area with few petrol stations, it is advisable for drivers to ensure they have enough fuel. Preparing for retirement is no different.
That's why the Old Mutual Generation portfolios have been designed, in collaboration with advisers, to supply income to fuel clients' unique retirement journeys. They seek to do this through meeting the needs of a new generation of retirees, who desire a flexible and bespoke solution.
The portfolios enable clients to decide, after consultation with their advisers, what level of income they want to take and when they would like to take it, in line with lifestyle goals and attitudes towards risk.
As such, they don't stipulate the amount of income clients are likely to receive. The only target they do have is that they aim to achieve returns above inflation of either +3%, +4% or +5% over the medium term, depending on the Generation portfolio.
At the same time, they aim to mitigate against the impact of market stress through active short-term risk management.
Our dynamic asset allocation approach involves holding some assets that provide a level of 'natural' yield, including a core of equities. These assets contribute to the funds' focus on aiming to generate relatively smooth total returns, acknowledging the damaging effects of so-called 'pound-cost ravaging' for those investors who are withdrawing money from their pension pots.
My colleague Paul Craig and I manage the portfolios, and we are supported by an investment unit with vast experience in managing multi-asset funds, equities, fixed income and alternatives.
Taken together, all this means we seek to offer investors a smooth ride as they embark on their retirement journeys – and ensure their fuel lasts the distance.
|Asset allocation name||Attitude to Risk||Risk Rating|
|Old Mutual Generation Target 3||Moderately Cautious||2.8|
|Old Mutual Generation Target 4||Balanced||3.7|
|Old Mutual Generation Target 5||Adventurous||5.1|
Important information: For professional use only. Past performance is no guarantee of future results. The value of an investment and the income from it can fall as well as rise and investors may not get back the amount originally invested. Old Mutual Global Investors (OMGI) has no house market view and opinions expressed are the views of individual fund manager(s) as at the time of writing. These views may no longer be current and may have already been acted upon. Any underlying research or analysis has been procured by OMGI for its own purposes and may have been acted on by OMGI or an associate for its or their own purposes. OMGI is the appointed investment adviser for Old Mutual Fund Manager’s in-house OEIC funds. Old Mutual Global Investors is the trading name of Old Mutual Global Investors (UK) Limited. Old Mutual Fund Managers Limited, 2 Lambeth Hill, London EC4V 4AD. Authorised and regulated by the Financial Conduct Authority. A member of the IA. Old Mutual Global Investors (UK) Limited, 2 Lambeth Hill, London EC4P 4WR. Authorised and regulated by the Financial Conduct Authority. Telephone calls may be recorded for security purposes and to improve customer service. OMGI 10/15/0082