Ageing consumer drives long-term growth at Challenger

[NR1.PNG]

The ABS forecast the level of Australians aged over 65 will grow by 75% over the next two decades. While there will $58b moving from the accumulation to retirement phase in 2017 (Deloitte), this is forecast to continue to grow at 13% CAGR over the next ten years, as the number of retirees grows. Given Challenger’s leading position in annuities products, the company estimates it can capture 4% of this transfer every year.

Challenger continues to broaden its annuities distribution network, signing partnerships with AMP (from FY18) and Mistui Sumitomo Primary Life in Japan (in FY17), having already launched with Colonial First State in 2015. This should see further advisor groups and platforms integrate with Challenger over time to remain competitive. Regulatory tailwinds are also positive with the government requiring super fund trustees to recommend Comprehensive Income Product for Retirement (CIPR) from 2018, a product first created by Challenger and VicSuper.

The ability for Challenger to provide attractive rates of organic growth driven by its strong market positions in structurally growing end markets should continue to see it garner a premium rating to other investment management companies. Challenger remains an attractive long-term investment capable of generating strong compounded returns for shareholders.

Contributed by Nick Reddaway, Managing Director and Fund Manager at Paragon Funds:  (VIEW LINK)


1 stock mentioned

By adopting a thematic-led, fundamentally-driven high-conviction strategy that can profit from rising and falling share prices, Paragon aims to provide its clients with excellent long term returns regardless of market performance.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.