Magellan (ASX:MFG) is launching a new retirement fund. Here’s what we know

Magellan has finally released details about its new retirement-focused product. Here are the details
The post Magellan (ASX:MFG) is launching a new retirement fund. Here’s what we know appeared first on The Motley Fool Australia. –

Until now, Magellan Financial Group Ltd (ASX: MFG) was mostly known for its suite of listed managed funds. Or Listed Investment Trusts (LITs) if you want to get technical.

Over the past decade or so, these funds have become some of the most popular managed investments on the ASX.

Take the Magellan Global Fund (ASX: MGF). It’s a globally focused fund that holds companies such as Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Netflix Inc (NASDAQ: NFLX).

It targets both capital preservation and strong compounding returns. As of 30 April, it was worth a staggering $3.18 billion.

Historically, Magellan has been famous for this kind of fund. As far back as 2019, Magellan was flagging a retirement-focused product for its massive base of retail investors.

Until today, it had been very coy on what exactly this might be, only ruling out that it would be an annuity-style product.

But that could be about to change after Magellan finally revealed some details about its new retirement-focused product. An ASX release this morning sheds some light on this new offering.

A retirement fund?

According to the release, the new product will be known as ‘FuturePay’.

Magellan didn’t offer too much detail, instead spruiking that more information will be available at the product’s official launch on 1 June.

But here’s what Magellan CEO Brett Cains did say about the “upcoming retirement income-focused solution”:

We are pleased to announce the launch of Magellan FuturePay. We believe it will help address the challenges faced by many investors and their advisers, particularly those dealing with the problem of establishing a retirement income.

This is an important topic and I look forward to discussing our approach in further detail at our upcoming launch event.

However, a report in the Australian Financial Review (AFR) this morning has some more details.

The AFR says the fund will target an initial yield of 4.3% per annum. This will be paid monthly to investors, which Magellan aims to adjust for inflation and grow over time.

Like most of Magellan’s other funds, FuturePay will focus mostly on global equities. It will be able to divert profits in times of outperformance into a trust.

The fund will also reportedly be backed up with capital, and a loan facility capped at 2% of the fund’s value, from Magellan’s own balance sheet.

This structure will allow Magellan to smooth out its distribution payments over time, balancing out market gyrations.

It’s also estimated the new FuturePay fund will list on Wednesday 2 June, just after the official launch. It will reportedly list on the Chi-X exchange under the ticker code ‘FPAY’.

The fund will charge a management fee of 1% per annum.

About the Magellan share price

The Magellan share price has risen slightly on the back of this news.

Magellan Financial Group shares are up 0.48% at the time of writing, to $47.74. That’s largely in line with the S&P/ASX 200 Index (ASX: XJO).

This share price gives Magellan a market capitalisation of $8.74 billion, a price-to-earnings (P/E) ratio of 21.56 and a trailing dividend yield of 4.61%.

Learn where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be thefive best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

2 ASX dividend shares that could be a buy for income today

2 ASX 200 dividend shares that could offer good income

Why is the Magellan (ASX:MFG) share price up 4% today?
2 ASX 200 shares to buy for dividends

ASX 200 rises, Macquarie falls, Magellan declines

The post Magellan (ASX:MFG) is launching a new retirement fund. Here’s what we know appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!