Colonial First State has formed an alliance with Sanlam resulting in three new funds delivering a risk management strategy designed to respond to the low interest rate environment, helping retirees.
The global financial services group will overlay its active risk management strategy to three Colonial First State index funds, creating the funds. The three funds will be the Sanlam Managed Risk Australian Share fund, the Sanlam Managed Risk Global Share fund, and the Sanlam Managed Risk Multi-Index High Growth fund.
"Sanlam's managed risk strategy is particularly well-suited to retirees who often want the benefits of share market participation, including the opportunity to benefit from dividends, but are often uncomfortable with the risks inherent in those markets," Colonial First State general manager for product and investments, Peter Chun, said.
"It provides an alternative way for Australian retirees and their advisers to confidently respond to the challenges of a low interest rate environment."
Chun said the managed risk strategy is designed to help minimise the impact of major market declines by reducing clients' exposure to equities in falling markets, while allowing participation in rising markets.
Cobus Kruger, Sanlam Global Investments Solution chief executive, said through the strategy Australians could leverage a strategy that addresses market, liquidity and sequencing risks, and relieve some fear around investing and market declines.
The funds is expected to be available from June on Colonial First State FirstChoice platform, and as a standalone investment strategy for self-managed super fund (SMSF) and direct investors.