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MAM Funds plan Oeic version of diverse income trust

MAM Funds is launching an Oeic version of its diverse income trust in the form of a UK equity income multi-cap fund.

The fund will be managed by the diverse income trust co-managers Gervais Williams and Martin Turner.

It will typically have 10 per cent in FTSE 100 companies, 30 per cent in mid-cap and 20 per cent in small cap, 10 per cent in fledgling stocks and 30 per cent in AIM stocks.

Income will be enhanced by the flexibility to sell covered call options on 10 to 15 per cent of the portfolio. 

The fund will target a yield of five per cent. MAM head of business development Neil Bridge says he expects dividend growth of 3 to 5 per cent per annum.

The minimum investment will be £1,000 for retail investors, with an initial charge of three per cent and a 1.5 per cent annual management charge.

The launch, which will be subject to FSA approval, is scheduled for early October.

Bridge says: “We believe there is a demand to generate income away from the FTSE 100 companies that form the backbone of the majority of the UK equity income funds. The product will offer a diversification of income across the market-cap range in the UK.”

Bestinvest research analyst Mark Lane says: “The UK equity income sector is crowded and once the fund gets bigger, it will have to get into the bigger stocks in order to grow.”

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Comments

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  1. In relation to the comments from Mark Larne at Bestinvest. We will softclose the fund at a Size where Gervais can continue to invest in the Mid and small cap stocks as per the ranges we will outline at launch. The fund will not become a FTSE 100 vehicle.

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