Investment management firm Challenger is within weeks of launching a new fixed income fund for advisers.
In an exclusive with Financial Standard, Rommel Hacopian, general manager, platforms and national key accounts said the new fund will be available in mid-April after the final stages of testing are completed.
"Advisers have been looking for ways to easily and reliably meet the minimum drawdown requirements of account-based pensions, so they can spend more time finding growth opportunities for their clients, who could be in retirement for up to 30 years," Hacopian told Financial Standard.
The fund will provide investors with fixed monthly distribution payments locked in at the onset of the policy until the fund's maturity date.
Challenger said the fund will offer competitive interest rates that are locked in at the start of investing and will not be linked to the market future distributions, therefore are not impacted by market movements.
"This will provide investors peace of mind that they will be receiving regular, fixed payments regardless of market performance," said Challenger.
After the fifth consecutive year the Government has had to step in to reduce the minimum drawdown pension due to negative markets movements and to prevent investors from being forced to sell depreciating assets to fund cash flow needs, Challenger said a guaranteed monthly distribution fund can help lock in cash flow required to meet living expenses while preserving other capital.
Currently a panel of financial advisers are testing the fund prior to its launch.