CEO Leeanne Turner said the product is one of the first of its type to be launched by an industry fund and will have strong appeal to Australians given the ageing population and the fact that the GFC is still fresh in peoples’ minds.
“The product fills a gap in the marketplace with few superannuation funds currently offering investment options designed to deliver capital stability and manage investment volatility. The option is targeted at investors close to or transitioning to retirement, but as it still retains some exposure to growth assets, younger members with larger than average superannuation balances may also find this Option appealing” Ms. Turner said.
The Income Focussed Option has a significant tilt to cash and dividend-generating listed equities. Its current allocation includes 22.5% invested in fixed interest via global credit which offers an attractive yield when compared to government bonds. Against a 40% allocation to equities in February, the Option held 15% cash. The Option also invests in less volatile income yielding assets such as infrastructure, property and alternative credit assets.
“The Income Focussed Option targets a reliable income stream* of RBA cash rate + 2% per year over the medium term. Importantly, the Option favours shorter-dated debt to help deliver capital stability. The exposure to growth assets also gives investors the opportunity to grow their capital,” Ms. Turner said.
She said the option has had a pleasing take-up in the immediate period following its launch. Greater interest is expected as more Australians approach retirement and as concerns grow that share markets may be overvalued.
“MTAA Super was one of the first funds to give our members investment choice. The Fund was also an early adopter of alternative investments, buying infrastructure assets such as Flinders Ports, Sydney Airport and Brisbane Airport over a decade ago. We continue to build
on this legacy by working to maximise our members’ retirement outcomes. We look forward to communicating with members and non-members alike about this and other investment options in our portfolio”.
Key features of the Income Focussed Option:
Find out more information about the income focussed option here.
* Note: Income from dividend yielding assets in this option is reinvested in the option rather than being distributed as income.
Media contact: Rebecca Nicholson on 0409 216 053.