It has been running goals-based funds in Australia for a number of years and has only recently bought the concept to New Zealand.
Peter Verhaart, who heads AMP Capital’s multi-asset group, says the idea of the fund is to help provide investors with a stable and reliable income stream in retirement.
He says investors have “mental” accounts for retirement, and capital needs to be allocated between these accounts.
The four accounts which people have in their minds are:
AMP Capital has two funds to meet goals. One is a new PIE fund called the Income Generator Fund. It fits with the “essential” account and aims to provide regular income and predictable distributions.
The second is its Global Multi-Asset fund which was established in December last year. The fund is for the lifestyle account and has a real return focus and active risk management. It invests in an AMP fund and a Schroders Multi-Asset fund.
Verhaart says the goals-based fund approach aims to give investors a “smoother investment journey”.
He says the goals-based investing is “highly aligned” with an investor’s financial and lifestyle objectives, plus the asset allocation matches goals, not just the client’s risk profile.
The Income Generator fund aims for a stable income stream which beats term deposits and it has lower volatility then a typical balanced fund. It is liquid and priced daily.
The Multi-Asset fund invests with “defined volatility levels” and aims to provide strong capital growth as smoothly as possible over rolling three to five year periods.
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