There has been a "dearth of innovation" in investment solutions created for the decumulation stage, with many providers "repurposing" accumulation products instead, Old Mutual Global Investors (OMGI) has said.
The firm's multi-asset co-director Anthony Gillham warned this was a problem as decumulation required a "completely different investment mindset" due to the different set of risks involved in retirement. Investors were much more vulnerable to ‘sequencing risk' in decumulation for instance, as they cannot recoup losses from sharp market dips in the same way as in accumulation, he said. The aim in decumulation therefore was to minimise the impact of those market dips. Research from OMGI found that, from 2000 to 2017, if an investment manager was able to mitigate a third of the market...
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