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Income revamp for Jupiter fund

Jupiter is to restructure its £13.5m North American fund to develop a stronger income stream.

It is writing to investors about making a number of changes to the fund, including changing the name to Jupiter North American income fund.

As well as investing for income and long-term capital growth, the firm is also proposing taking the annual charge from capital rather than income, which will bolster net yield.

Jupiter is also looking to introduce accumulation units, enabling investors to reinvest dividends automatically if they do not require the income.

The move is part of Jupiter’s drive to widen its income range. The North American portfolio will be positioned alongside its £139m Japan income fund and Malcolm Millar’s European income fund, which launches next month.

The fund will continue to be run by Sebastien Radcliffe and target companies that are growing their earnings and producing a rising dividend.

Radcliffe says: “Yields in the US are currently around 1.9 per cent, compared with 3.4 per cent in the UK. However, the prospects for dividend growth is excellent. Companies have been enjoying strong growth in profits and corporate balance sheets are in excellent shape, with gearing low and cash balances high.

“This, combined with the rising demand for income from an ageing population and the favourable tax treatment of dividends, is encouraging companies to grow their dividends while continuing to reinvest for growth. With current forecasts of around 10 per cent dividend growth for 2007, the outlook for US income investors is excellent.”

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