The F&C portfolio had held the Schroder fund since launch in 2004 to provide global equity income exposure but the total return has been disappointing in difficult market conditions compared with the Veritas fund.
F&C head of fund of funds Dean Cheeseman says there have been a few global equity income fund launches in recent months but the Veritas fund had the edge over the competition. It has a three-year track record and scores well on F&C’s traffic light screening system.
He also thinks highly of the Veritas team. Its chief executive is former Newton Mellon chief investment officer Charles Richardson and fund manager Andy Headley was previously an equity analyst at the same company.
Cheeseman says: “Veritas global income has been purchased only for the distribution fund, which has 30 per cent allocated to equities.
“The UK represents the lion’s share of the equity allocation, so the easy way to get the necessary global exposure was to buy a global income product.”