Christian Pellis, Amundi global head of external distribution, said the fund would be launched later this year as a “wealth preservation type solution” aimed at generating a sustainable income for those in the retirement stages of their lives.
“The fund’s name still needs to be decided, but it is similar to the First Eagle Amundi International Fund, which has some equities, fixed income, gold and cash, and you manage that with the idea of not losing money and to generate an income for the investor.
“I think over time, if you do that well, those are the products of the future”, he said in an interview with International Adviser.
First Eagle is the asset management company which runs this existing Luxembourg SICAV sub-fund for Amundi out of New York.
“We are selling their product ex-US for them,” said Pellis.
Investor's purchasing power
The fund is marketed as preserving investor’s purchasing power while generating returns regardless of market conditions by focusing on “companies temporarily overlooked by the market within a global investment universe”.
It may also use financial derivatives such as options, warrants, swaps and/or futures.
Pellis said this type of fund appeals because regardless of what the market is doing over a long period, which he specifies as five years plus, they give positive returns.
“You make more by losing less is the credo of this particular product. These are funds which people want to buy much more of, definitely when you have the RDR share class.
“People buy once and leave the money, quite often, in that one particular product.
“This kind of solution is where there will be much more demand in the next five to 10 years.”
He predicts ageing population demands for “frequent income” will become prevalent in Europe, Singapore, Hong Kong and China.
Budget freedom
The UK Budget 2014 saw huge changes in pensions which offer greater freedom to do what clients want with their retirement funds.
Interim changes took effect on 27 March, and more radical changes to remove restrictions on pension drawdowns, and the ability to cash in all accumulated pension funds in one go, will follow in April 2015 following public consultation.
Any withdrawals in excess of the tax-free lump sum will be subject to income tax at the member’s marginal rate.
