Santander targets retirement market with multi-asset income fund launch

Santander Asset Management has launched a multi-asset income fund aimed at the retirement market.

The Atlas Income Portfolio, which will be managed by Atlas Growth fund managers Tom Caddick and Toby Vaughan, is a risk-targeted multi-asset income fund and aims for monthly income of between 4 per cent and 6 per cent a year.

The fund has a risk profile of four under normal market conditions with the flexibility to move between three and five in more extreme market conditions.

The asset manager has also added retail share classes for its existing Santander Enhanced Income and Santander Strategic Bond funds making the funds available to the UK retail market.

The £50m Enhanced Income fund, which is managed by Stephen Payne and is not constrained by a benchmark, focuses on longer term returns and targets stable and profitable companies rather than companies with big dividends.

The £20m Strategic Bond fund, run by Azim Meghji, invests in both sterling and global fixed income markets.

Nigel Chappell, head of intermediary distribution and development at Santander Asset Management UK, says: “While retirement might be changing, the majority of people still want a good level of predictable income and confidence that their money is not going to run out. While investment risk is still a factor, people in retirement are now having to face the reality of inflation and longevity risk, as well as the escalating cost of income guarantees.

“Our new income funds offer a target level of smoothed and sustainable income. Our fixed income fund benefits from a small and nimble investment team who can quickly navigate changing bond markets, ensuring clients have a solid and stable income within a well-diversified retirement portfolio.”

The annual management charge for the Atlas Income Portfolio will be 0.4 per cent, while the Enhanced Income and Strategic Bond funds will both charge 0.5 per cent.