Education Magellan FuturePay

Came across this today

Presentation:

FuturePay Presentation - here

Website - here

Initial yield of 4.25%

Whats everyones views?

Cheers,
Oracle.

 

Fees? Any guarantee of capital and income? If so, who pays eventually? Maybe multiple ????'s to the previous questions.

 

I've answered my own question. Others may wish to look into the product further.

 

I hold Magellan global fund and generally a fan of Hamish Douglass. On first appearances this is a gimmick being marketed to retirees as some sort of retirement product. It’s just another managed fund with the point of difference being this will manage distributions so investors get a regular 4.25% income. Dividend smoothing of sorts with some marketing spin. Not too dissimilar to an LIC.
Maybe the only difference is higher fees to pay for all the marketing.

 

Its all about funds under management and the commission it generated. Ofcourse, marketing is critical part of doing business. Can't blame them for trying to sell their product.

Generally, some people would never own equities thinking they are too volatile and risky. But they also fail to realise that term deposits over the long term can be even more riskier. Risks with equities reduces the longer you hold. If Magellan can deliver half descent product (low volatility with predictable income) it could mean a lot of people could enjoy some of the benefits of owning equities who would otherwise stick to low term deposits which is bound to produce negative real returns.

I believe their target audience is such people who stick to term deposits for their regular predictable income but with interest rates so low there could be few who would be willing to switch.

Cheers,
Oracle.