This article originally appeared on our sister publication, Advisor.ca.
CI Investments has launched the G5|20 Series, a new mutual fund that aims to provide cash flow, growth potential and protection from market downturns.
“As millions of Canadian baby boomers approach retirement, having a stable retirement income will be…key,” says Derek J. Green, president of CI.
But, he says, “Low interest rates mean fixed-income investments generate little return. [Since] many investors are wary of volatility in equity markets, we designed our [new] series to help.”
This mutual fund will be actively managed, and has a diversified portfolio of income and growth investments. It also has a 25-year lifespan. Protection against downturns is offered through risk management strategies.
After its five-year accumulation phase, the fund will pay out an annual cash flow for the following 20 years. This will be equal to 5% of an investor’s initial investment, or to their fund’s market value at the five-year anniversary date—whichever is highest. Bank of Montreal guarantees the cash flow.
The features of the fund include:
- Active asset allocation, managed by CI Investment Consulting, an in-house team that oversees $20 billion in CI’s managed solutions.
- Eligibility for registered and non-registered accounts.
- Tax efficiency for non-registered accounts.
- A risk management overlay that’s provided by Nexus Risk Management of Chicago. It includes strategies that have typically only been available to insurance companies, and institutional and wealthy investors.
The G5|20 Series is part of the CI Guaranteed Retirement Cash Flow Series, under which funds with guaranteed cash flow will be available quarterly. It will be available for purchase until the end of September.