Navigator enters alternative fray

Navigatorhas added a new hybrid and high yield category to its platform to provide those investors disappointed by the under performance of traditional asset classes with access to alternative investment funds.

The new category provides access to three hybrid and high yield funds:UBSHybrid Income Fund,SchroderWholesale Hybrid Securities Fund andChallengerHigh Yield Fund.

According to Navigator research manager Stuart Fechner the funds have been included to provide a reasonable level of yield to those investors, usually already in retirement, wanting a steady income stream.

“Certainly a number of advisers have approached us and mentioned that their older clients, particularly those in allocated pensions where income is extremely important, do not want their portfolios to experience negative growth,” Fechner says.

“These products have a lower level of risk than equities but slightly more than traditional fixed interest investments.”

The types of investments covered in the hybrid and high yield funds include convertible preference shares, converting preference shares, convertible notes, converting notes and income securities.

“Investors are finding the growth strategy they may have been following for the past few years may have failed them and are looking for a mix of investments with a lower level risk,” says Fechner.

Fechner says over time while growth funds are likely to outperform other funds many people, particularly those over 65, are not willing or able to wait.

“This is where you may consider investing in a hybrid or high yield fund. You are still investing in a fund with some growth potential, however this is balanced by the fund having an increased focus on providing a strong and consistent level of income.”