The Harewood UK enhanced income fund is set to be offered under a Ucits Oeic strategy and will be based on selling call options with short-maturity on a daily basis, which the group says will enable the fund to capture positive market performance. At the same time, the group, which is part of BNP Paribas, says this strategy will provide a net asset value cushion when markets are falling.
The fund will seek to achieve the potential for capital growth for investors, while addressing investors’ demands for income. This will be obtained from equity dividends through an underlying exposure to the FTSE 100 Index and BNP Paribas’ enhanced daily covered call strategy.
Sisouphan Tran, the head of Harewood Solutions, says the now that the strategy is available in a Ucits Oeic format, it is likely to be better received than earlier products.
In a statement, Tran says that a high and sustainable level of income combined with a defensive product is a very valuable proposition to investors, especially when market uncertainty remains a significant factor.
The minimum investment will be £1,000. Retail investors will have to pay 4 per cent initial charge and 1.5 per cent annual management charge.