Challenger (CGF): Right place, right time

Challenger (CGF): Right place, right time. We see CGF as being in the right place at the right time, with its products targeted at the pension phase of superannuation as the baby boomers move into retirement. CGF has proven in recent years an ability to innovate, with new product like Care Annuity and Liquid Lifetime an example of the success. These products now account for roughly 30% of all new retail annuities sold, which is an impressive achievement given the products are relatively new. The following three opportunities will support a continued positive re-rating in CGF: the launch of a specific SMSF targeted product; the commencement of Deferred Lifetime Annuities (DLAs); and the creation of a 'wrapper' annuity that can be easily integrated and selected by advisers for the client. Our recommendation is a Buy and we elevate CGF to one of our favoured defensive stocks.