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Bloxham and Elite take the global way to income

The wealth management arm of Irish stockbroking firm Bloxham has teamed up with the Way Group’s Elite Fund Administration to offer a global equity income fund to the UK IFA market.

The Elite Bloxham global equity income fund is based on Bloxham’s Dublin-based global high yield fund, which was launched in 2002. The fund has an initial target yield of 4.4 per cent but Bloxham intends to increase this to 8-10 per cent a year. As well as income, the fund also aims for capital growth.

A team led by Pramit Ghose, who has 22 years investment experience, manages the fund. He has managed global equity income portfolios for almost 10 years.

When selecting stocks, the Bloxham team takes a cautious contrarian approach. This means that managing risk is the priority, but within these parameters the team will look for opportunities that others have missed, with the intention of investing before their view becomes the consensus.

Around 80 per cent of the portfolio will invest in mega-cap and bigger companies, with 20 per cent invested in more opportunistic plays.

The stock selection process begins with the use of quant screens to whittle a universe of 3,500 stocks down to 300 stocks. Stocks pass this screen if they have above average dividend yield, low debt, high cash cover on dividend payments and expectations of stable earnings growth.

Further analysis is then carried out, which leads to a final list of 50-70 stocks. When making the final stock selection, the team draws on a range of research, including face-to-face meetings. The portfolio is then constructed, with each holding comprising no more than 5 per cent of the portfolio. Bloxham uses an in-house computer program to identify the best time for buying and selling stocks.

This fund may appeal to investors who are looking to diversify their income investments away from the UK with a fund that does not take excessive risks. Its focus on bigger companies provides a comfort factor to some investors.

The options open to UK investors looking for global equity income may be few, so the Bloxham fund brings more choice to the market. However, competition could come from groups that are more established in the UK such as Schroders, JPMorgan and Legg Mason.

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