Vincent Stranges

Generation Life has announced the expansion of its investment bond menu with five new options across private markets, geared strategies and global small caps. Detailed in the latest product information sheet, the enhancements provide access to asset classes traditionally reserved for institutional investors, adding greater choice and deepening diversification for investors and financial advisers seeking tax-efficient portfolio construction.

Private markets

Two new private market strategies offer exposure to private credit and unlisted property:

• MPC Wholesale Investments Fund, managed by Metrics Credit Partners, provides private credit exposure through income-generating lending strategies
• Charter Hall Diversified Property Portfolio offers access to high-quality unlisted property with long-term capital-growth potential.

Private assets complement traditional listed equities and fixed-interest exposures by enhancing diversification and smoothing returns across market cycles. Their lower correlation to listed markets and less-frequent valuations can also reduce overall portfolio volatility.

These additions coincide with a growing interest in private markets, with global private capital AUM projected to reach over US$18 trillion by 2027, up from US$10.89 trillion 2022[1]. Australian investors are increasingly turning to private capital markets for better returns, and the new options support that participation in a tax-efficient investment bond structure.

Geared funds

Two additional geared strategies provide professionally managed geared exposures, without personal borrowing or credit implications for investors:

• Generation Life Tax Effective Australian Share Fund (Geared) managed by Invesco
• iShares Hedged International Equity Index Fund (Geared) managed by BlackRock

The funds target a conservative 45 per cent loan-to-value ratio, and all borrowing costs of the fund are tax deductible within the fund to drive tax efficiency. Access to institutional borrowing rates – rather than retail borrowing rates – can further enhance cost effectiveness.

Global small caps

A global small-caps strategy delivers exposure to high-quality smaller companies with long-term growth potential.

• Langdon Global Smaller Companies Fund, managed by Langdon Equity Partners Limited – a specialist global small-cap strategy targeting high-quality companies with sustainable long-term growth characteristics

Small-cap allocations can complement broader global equities by providing exposure to earlier-stage, innovative businesses with differentiated sources of return.

Vincent Stranges, Head of Product at Generation Life, said the enhancements strengthen Generation Life’s position as a pioneer and market-leader in investment-bond innovation.

“Investor expectations have changed. People want access to the tools and opportunities that have driven institutional portfolios, but without the complexity or barriers to entry that usually come with them. That’s exactly what this expansion to our investment menu is designed to achieve.”

“By offering these strategies within an investment bond structure, investors and financial advisers can access them more easily, in a way that supports their long-term goals. Ultimately, it’s about broadening access to high-quality investment opportunities that are genuinely meaningful and aligned with the evolving needs of investors and financial advisers.” Mr Stranges concluded.

As Australia’s leading provider of investment bonds, Generation Life remains committed to delivering forward-thinking solutions that optimise after-tax outcomes and empower advisers and investors to build lasting wealth with confidence.

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Vincent Stranges, Head of Product at Generation Life, said: “Estate planning will be a significant focus for us in 2023. With the Federal Government signalling its intention to legislate the objective of superannuation and introduce limits on superannuation balances, a shift away from superannuation as an intergenerational wealth transfer vehicle is inevitable.”

“At Generation Life, we recognise that estate planning certainty is important for those that are seeking to or have accumulated wealth. We’re excited with the latest major updates to our estate planning offering, providing the financial adviser network with a sophisticated, but simple way of helping their clients transfer wealth, offering peace of mind without sacrificing flexibility.”

Generation Life’s LifeBuilder EstatePlanner feature helps financial advisers by providing a tax-effective wealth accumulation solution that also provides their clients with the flexibility to structure their investment, as part of – or outside of – their will and legal estate. The Future Event Transfer feature can be used to control when and how their client’s investment will be tax-effectively transferred and accessed by the next generation on the death of the owner, including locking in a regular amount to be paid to the recipient once ownership is transferred. Alternatively, they can use the beneficiary nomination feature, where they can set one or multiple beneficiaries to receive the proceeds of their investment on the death of the nominated life insured.

These new enhancements also offer financial advisers the ability to give their clients peace of mind, knowing that they control when the future transfer of their investment may occur and that they can change it at any time. If they select their death as the transfer event, the tax-free transfer passes outside of their will and legal estate and potentially helps to avoid the challenges and claims that can be associated with a will. They can also avoid possible lengthy delays and legal costs associated with the granting of probate or the administration of their estate.

This enhanced flexibility of Generation Life’s investment bond solutions has been designed with advisers and their clients in mind; offering both parties the ability to curate tailored investment bond portfolios that can flex to their unique personal needs and financial goals.

Vincent Stranges, Head of Product at Generation Life, commented: “The Generation Life LifeBuilder provides a tax-effective wealth accumulation solution with embedded flexible estate planning and intergenerational wealth transfer features solution, particularly in light of the expected changes to superannuation.”

Generation Life’s extensive range of investment solutions means that clients can access personalised investment bond options, while financial advisers benefit from a far easier process to put those options into action. Recognised as an industry leader and creator of innovative financial products and solutions, Generation Life is continuing to build momentum. In late 2022, Generation Life was recognised with four Investment Bond Excellence Awards including the Overall Investment Bond Excellence Award, announced by Plan For Life, Actuaries & Researchers^[1].

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[1] Plan for Life, Investment Bonds Market Report for period ended 30 June 2022.

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