Chancellor George Osborne's major shake-up of pensions, announced in last year's Budget, came as a major shock to the financial services industry.
The reforms, which have come into force this week, will give retirees far greater flexibility on how they use their pension pots.
They have been seen as a huge opportunity for asset managers, many of whom have already acted quickly to get their fund ranges ready to meet the demand from retirees.
Since the Budget announcement, there have been a number of multi-asset income fund launches, while some fund groups have moved quickly to revamp existing strategies.
Since the Budget announcement, there have been a number of multi-asset income fund launches, while some groups have revamped existing strategies.
Here, Investment Week rounds-up of some of the key product launches as of the start of 2015.
One of the first providers to tap into potential demand following Osborne's announcement, Threadneedle launched a global multi-asset income fund for Toby Nangle last July. The long only fund invests across asset classes and targets a yield above its benchmark, which is a composite of the MSCI World index, Barclays Global Aggregate and IPD UK Monthly index.
Legal & General Investment Managment
LGIM launched the Retirement Income Multi-Asset fund in September, aimed at investors looking to draw income from their pension pot. It targets a return of the Bank of England base rate plus 3.5% over five to seven years.
Schroders also launched a global multi-asset income fund in November which mirrored an existing £4bn offshore strategy- the Schroder ISF Global Multi-Asset Income fund. It allocates to high yielding and high quality global bonds and equites. The fund targets an annual distribution payment of 4%-6% in monthly installments and a total return of 7% per annum, while keeping volatility at around 5%-7%, and below 10% at all times.
BlackRock revamped its Balanced Income product in October, which included the removal of its UK equity bias and a reduction in its equities allocation. It has since been renamed the BlackRock Global Multi-Asset Income fund and has moved from the IMA Mixed Investment 40-85% Shares sector to the 20-60% shares sector.
The firm rebranded its multi-asset Portfolio fund in November to become the Dynamic Capital Growth fund. The changes, which included the use of passives within the fund, are intended to bring the fund to market at a lower price, thereby suiting investors in auto-enrolment schemes. Using three-month LIBOR plus 3% as its benchmark, the fund can invest in equities, fixed income, money market instruments, commodities and cash.
PSigma Investment Management
The firm has added a cautious income strategy to its model portfolio range, which will have a maximum of 30% invested in developed and emerging market equities. It has an investment objective of inflation plus 2% and an estimated yield of 3%. The firm described the new strategy as helping "clients generate a healthy income in a yield-starved world".
Due to launch on 4 February, the firm has expanded its range of multi-asset products with a multi-asset income fund. This will be run by Paul Flood and Nick Clay and aims to provide monthly income with the potential for capital growth over the longer term by investing in a wide range of asset classes. It follows an overhaul of the firm's multi-asset range and fee reduction on two portfolios from a 0.75% annual management charge to 0.62%.
Royal London AM
While no product has yet been announced, the firm's hire of former Fidelity multi-asset director Trevor Greetham as head of multi-asset is a strong signal of a potential launch. The firm has said Greetham will be involved in developing new asset allocation solutions for institutional and retail clients as it seeks to broaden its offering in the multi-asset space.
Kames launched a diversified income fund for manager Vincent McEntegart in February 2014, just before the Budget announcement. It was initially designed for sister company Aegon UK's 'at retirement' market and was later made available to the wider market. The manager applies an active asset allocation strategy across five 'income engines' of investment grade bonds, high yield bonds, global equity income, UK equity income and alternatives.
Back in 2013, Fidelity expanded its multi-asset range with the launch of Balanced and Growth & Income portfolios. These two funds have a higher allocation to equities and infrastructure as well as high yield bonds and alternatives than the firm's existing multi-asset Income portfolio.
Architas and technology firm BirthStar recently launched seven retail funds that follow an age-based strategy more commonly associated with default auto-enrolment (AE) pension funds. The Architas BirthStar Target Date funds are managed by AllianceBernstein in line with a 'target date' - the point at which an investor wants to start withdrawing from their fund.
Aberdeen Asset Management
In April, Aberdeen Asset Management launched four low-cost multi-asset funds to be managed by its investment solutions team. The fund range consists of the Aberdeen Multi Asset Conservative fund, and three Multi Asset Growth funds, each taking variable levels of equity risk. The Conservative fund has an ongoing charges figure (OCF) of 50bps, with the trio of growth funds charging 60bps.