According to the firm, where previously the funds had both an explicit 3 or 4% return over a rolling period and a 4% income target, the funds will now seek to beat inflation by 3 and 4% respectively and offer the potential for capital growth.
At the same time, the firm said, they aim to mitigate against the impact of market falls through a focus on short-term risk management”.
The firm has also announced the launch of a third fund in the range that targets a total return of 5% over CPI.
Total return focus
An OMGI spokesperson said the decision was taken, partly in conversation with financial advisers who are looking for a stronger focus on total return for near-retirement clients.
Warren Tonkinson, managing director, Old Mutual Global Investors said: “The introduction of the pension freedoms in April 2015 has led to an increased demand for flexible investment products that allow customers to secure both an income and capital growth in retirement. The Old Mutual Generation portfolios have been designed in conjunction with financial advisers to ensure they provide customers with a flexible way of drawing down their assets.”
The firm has also the taken the decision to change the manner in which funds are invested.
Wider strategies
Where before the portfolios were invested predominantly in third party funds, under the new objectives the managers will be able to employ a wider range of strategies and will be able to invest directly in income generating stocks.
According to the firm, it already has the resources and expertise in place to select income-generating stocks from an expertly monitored list, and will also look to make greater use of its highly regarded UK and European stock pickers.
As a result of the recently announced departure of Ventre, the newly revamped funds will be run by Anthony Gillham and Paul Craig.
Gillham, who is co-investment director of the Old Mutual Wealth Investment Division multi-asset unit, currently manages the £109m Old Mutual Voyager Strategic Bond Fund and co-manages the £211m Old Mutual Managed Fund.
Craig currently manages the top-performing £2.6bn¹ Old Mutual Cirilium portfolios, the firm said, both will be supported by a 24-strong multi-asset capability, which combines the multi-asset expertise of OMGI and Quilter Cheviot.
As a result of the changes the funds have been renamed.
Old Mutual Generation Target 3:4 becomes Old Mutual Generation Target 3 an d Old Mutual Generation Target 4:4 becomes Old Mutual Generation Target 4.
