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LeggMason trust straddles income and growth

LeggMason Investors Asset Managers, formerly known as Johnson Fry, has introduced an investment trust which will invest primarily in the US for long-term growth and high income.

The LeggMason Investors American Assets fund will be listed on both the London and Channel Islands stock exchanges.

It will invest 50 per cent in US stocks, such as Microsoft, Amazon and AOL-Time Warner, with 15 per cent in US bonds and other fixed-income securities. The remaining 35 per cent will be in a portfolio of shares from UK split-capital investment trusts. It is anticipated that an income of 8.25 per cent will derive from the bonds and split-cap shares, while the US stocks will provide long-term growth.

Income of 8.25 per cent is quite high and therefore comes with increased risk. However, dividing the fund between bonds and stocks spreads the risk. Investors might also be wary of focusing their investments in the US although fears that the stockmarket is overvalued have not stopped it from growing over the past few years.

According to Standard & Poor&#39s, the Legg- Mason income & growth fund is ranked third out of 33 funds, based on £1,000 invested on a mid-to-mid basis with net income reinvested over one year to September 11, 2000.

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