Fund manager Magellan has shut down its much hyped retirement income product FuturePay after it failed to attract sufficient client interest.

FuturePay was launched in June 2021 amid high hopes it could capture demand among retirees for safe and reliable investment products. But on Tuesday, Magellan said it would terminate the fund and return capital to investors.

“FuturePay was developed to meet the needs of many investors for retirement income and its unique structure achieved this objective,” the fund said in a statement.

“However, given the current size and modest anticipated demand for FuturePay, the board of Magellan, having considered the alternatives, has determined that it is in the best interests of investors to return their capital and terminate FuturePay.”

The closure of FuturePay marks yet another strategic retreat by Magellan.

In May, Magellan sold its stake in Mexican restaurant chain Guzman y Gomez after flagging in February it would make no further investments in private businesses.

Shares in Magellan fell 0.8 per cent on Tuesday to $11.89. Investors pulled $5.2 billion from its global equities, infrastructure and Australian equities funds over the June quarter. Morgan Stanley analysts said the global fund, which accounts for the majority of its assets, outperformed its benchmark by 2.7 percentage points over the quarter but trails it by 5.3 percentage points over one-year and 5.6 percentage points over three years.