We understand that one of the biggest concerns facing many retirees, and people entering retirement, is how they replace their salary when they stop work. And for many of these investors, they will also be concerned that they may outlive their money.
For investors who need to rely on an income stream to fund their living expenses, it’s important they consider products that not only provide a regular and reliable income, but that also provide enough capital growth to allow that income to grow with the cost of living.
Aims to provide a regular and reliable incomeAims to provide an income stream of around 6-8% per annum (before fees) over the long-term. We aim to provide a portfolio that has lower volatility than the broader market. We do this by aiming to invest in high yielding equities which exhibit lower than average risk characteristics.
Aims to mitigate against increases in the cost of livingThe fund invests in stocks which we expect will maintain or grow their dividends over time. As your capital is growing to offset increasing inflation, this means the income of 6-8% per annum should also grow in line with the cost of living.
Line of sight on your incomeThe estimated monthly distribution rate is announced six months in advance, providing investors with an indication of the expected income. 1
Focus on tax-effectivenessThe Fund is suitable for investors on a low marginal tax rate, such as retirees.
Returns are not guaranteed. Australian shares carry a higher level of short-term risk, particularly if you do not hold your investment for the minimum suggested investment timeframe. Other risks relate to the risk of capital loss, where future returns may differ from past returns. The level of returns may vary, the value of your investment may vary, and there may be the risk of invested capital.
In addition, a key risk associated with the Fund is market risk. The Fund will be affected by any risks associated with the shares listed, or about to be listed, on the Australian Securities Exchange. These include risks in relation to how those shares or other investments perform, how sustainable their earnings are, and other factors that affect value and performance, as well as risks associated with international investments and liquidity risks.
Risks associated with the fund may include share market investment risk, where the value of the Fund’s investment in listed securities may decrease as a result of adverse share market
Other risks may include or be associated with companies, investment management, derivatives, liquidity, property investments, sector, securities lending and small companies. Before choosing to invest in the Fund, investors should read the Product Disclosure Statement and Incorporated Information, and consider factors such as the likely investment return, the risks of investing and their investment timeframe.
The Fund's risk level is based on the estimated number of negative annual returns for the Fund over any 20 year period and is not a complete assessment of the risks of investing in the Fund. For instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than an investor may require to meet their objectives. Consequently, before choosing to invest or reinvest in the Fund, you should read the Fund's PDS and incorporated information and consider factors such as the likely investment return, the risks of investing and your investment time frame. Information about the methodology used for calculating the risk level is available here.
*Refers to on-platform Class A. Estimated yield is based on the unit price at the start of the period. It is important to note that the final annualised distribution yield will not be known until the end of the financial year, that the distribution yield estimate isn’t guaranteed, and that it may change over the period due to market movements in the Fund unit prices. We base our estimate on assumptions set out in this paragraph, and you should be aware that if facts differ from our assumptions, the final distribution yield may differ from the estimate. The estimate is based on the amount of income we expect to receive into the Fund over the period from 1 January 2017 to 30 June 2017, based on the current investments held by the Fund, the level of dividends and franking credits expected to be earned from investments held in the Fund. If the companies whose securities we hold in the Fund do not pay the dividends and franking credits they have forecast, or if the portfolio changes materially over the period, this may impact on our estimated distribution yield.
 Distributions for AMP Capital Australian Income Fund are preannounced six months in advance. It is important to note that the final annualised distribution yield will not be known until the end of the financial year, that the distribution yield estimate is not guaranteed, and that it may change due to market conditions.
The Lonsec Rating (assigned June 2016) presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445. The Rating is a “class service” (as defined in the Financial Advisers Act 2008 (NZ)) or is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). In New Zealand it must only be provided to “wholesale clients” (as defined in the Financial Advisers Act 2008 (NZ)). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold AMP Capital product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings methodology, please refer to our website at: www.beyond.lonsec.com.au/intelligence/lonsec-ratings
The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned June 2016) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessment’s and at http://www.zenithpartners. com.au/RegulatoryGuidelines
AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMPCFM) is the responsible entity of the AMP Capital Australian Equity Income Fund, known as the AMP Capital Equity Income Generator (Fund) and the issuer of the units in the Fund. To invest in the Fund, investors will need to obtain the current Product Disclosure Statement (PDS) from AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232 497) (AMP Capital). The PDS contains important information about investing in the Fund and it is important that investors read the PDS before making a decision about whether to acquire, or continue to hold or dispose of units in the Fund. Neither AMP Capital, AMPCFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this information. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this information, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This content has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of this information, and seek professional advice, having regard to their objectives, financial situation and needs.