The Generation portfolio aims to meet the needs of a new generation of retirees, who desire a flexible and bespoke solution.
Generation seeks to enable clients to draw down from pension savings while remaining invested in markets, through a diversified multi-asset portfolio. The portfolio seeks to beat inflation and offer the potential for capital growth. At the same time, it aims to mitigate against the impact of market falls through a focus on short-term risk management.
A Flexible Solution to Pensions Reforms
We have designed Generation in collaboration with advisers, following the introduction of the new pensions freedoms, to offer a flexible and bespoke solution for retirement. The portfolio is aimed at retirees who may not want to buy an annuity, or would like a solution that allows them to remain invested at the same time as having an annuity, or would like to keep the option open to buying an annuity in the future. It also seeks to help clients leave some or all of their pension savings to loved ones, should they so desire.
A Focus on Total Return and Beating Inflation
Our aim of delivering income and growing clients’ money seeks to provide a bespoke solution for finding a balance between yield and capital growth. This is different to many of the other retirement options available, where a choice has to be made between either ‘income’ or ‘growth.’ Moreover, we seek to protect against the ravages of inflation, as the Generation portfolio targets returns above the consumer price index of +3% over the medium term.
Active Short-Term Risk Management
Active short-term risk management forms a part of every stage of our portfolio construction process, to limit the risks that a poor sequence of returns permanently dents clients’ capital. This means the managers can act quickly to guard against losses in periods of market stress. The diversified nature of the portfolio, which holds uncorrelated sources of income, is also aimed at mitigating the risks of capital erosion.
Dynamic Asset Allocation
The Generation portfolio is invested primarily in funds run by a variety of managers, across a wide array of asset classes. This approach facilitates exposure to multiple regions, sectors and fund-management styles. In addition to a focus on any short-term risks to the downside, all positions are monitored continuously with an eye on the interaction between the funds held, to ensure an appropriate blend is maintained.