Legal & General launches Real Income Builder aimed at long-term savers
Legal & General announces the launch of Real Income Builder for external investors.
Real Income Builder is an outcome-oriented, long-only fund which invests predominantly in large capitalisation equities and investment grade fixed income securities. It has been specifically designed to meet some of the challenges faced by Defined Contribution (DC) and individual pension investors, but also has relevance to other long term savers such as retail and private wealth clients, charities and foundations.
Real Income Builder has built a track record from 31st December 2014 and has approximately £500 million of internal L&G money currently invested.
The investment goals of Real Income Builder are:
To generate an income from dividends and interest that grows by inflation plus 4% per annum measured over three year rolling periods, assuming that income is reinvested – for instance, while actively saving towards retirement. If income is withdrawn from the fund, for example during retirement, the equivalent goal is to grow income in line with inflation
To grow total returns in line with income – measured over longer periods of time. Real Income Builder does not sell units or otherwise impair capital values to generate income
To be “medium capital risk” or more specifically, around two thirds of equity market risk in a market downturn
Real Income Builder is designed as a to-and-through retirement product, aiming to give the individual saver clarity and confidence in the real income generating capacity of their savings at all stages of the journey. Transparent reporting of income should help individuals understand the planning and savings actions they need to take while time is still on their side. Real Income Builder is suitable as a standalone investment choice but can be used in combination with other investment strategies and decumulation products offered by LGIM.
The Fund is managed by a dedicated team led by Lance Phillips, Head of Active Equity at LGIM. Commenting on the launch, Phillips said: “We are delighted that Real Income Builder has delivered strong income and capital performance over the last twelve months. In addition, we think the clarity that Real Income Builder provides about retirement income potential will be a major help to individuals and advisors in making better planning decisions.”
Simon Hynes, Head of UK Retail Sales at LGIM said: “Real Income Builder’s investment objectives and approach are well positioned to address the needs of our clients. It brings much needed innovation to the table as the shift towards more outcome-focused investment solutions continues.”
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Notes to editors:
LEGAL & GENERAL INVESTMENT MANAGEMENT:
Legal & General Investment Management is one of Europe’s largest asset managers and a major global investor, with total assets of £757 billion*. We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
Throughout the past 40 years we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
The value of investments and any income from them may fall as well as rise, and investors may get back less than they invest.
There is no guarantee that the manager will achieve any of the objectives in any period. Capital invested in the fund as well as any income is at risk.
*as at 31 December 2015, including derivative positions and advisory assets.