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Product matters: Spanning the spectrum

The vogue for launching total-return bond funds continues, with Threadneedle’s absolute-return bond fund about to join the throng. The fund is a spin-off of the credit crescendo hedge fund run by head of fixed interest Robert Stirling.

Having gained experience with that product, Threadneedle wanted to launch a UK-specific version. The fund will be launched under the Ucits III regime and aim for a return of 2 per cent above cash. It will invest between 20 and 25 per cent in non-fixed-interest securities, derivatives, currency plays and so on, with the remainder in cash or short-dated bonds.

The fund will have the flexibility to go 100 per cent into cash but Threadneedle does not anticipate using the option. It will have an unconstrained remit, allowing it to move across the credit spectrum to gener- ate the required return.

Quentin Fitzsimmons, more widely known institutionally, is to be the lead manager, with Miles Bradshaw his deputy. We understand that Stirling will have an involvement, too.

It is an increasingly crowded area that Threadneedle is launching into but its decision to launch without an initial charge is likely to attract interest. Income is not payable in the usual way but will operate under a cash withdrawal facility that Threadneedle uses on other funds.

Minimum investment is 2,000 and there is a 1.25 per cent annual charge. It will be in the UK other bond or unclassified sector.


Have a heart

More Than PR manager Alison McCulloch and a friend recently raised 1,400 for the British Heart Foundation by hosting a charity curry night over in London’s heart of Eastern cuisine, Brick Lane. But it’s not all fun and Madras. The girls are also training their socks off for the New York Marathon, taking place on […]

Relief roads

Clerical Medical retirement planning manager Steve Meredith aims to steer employers and employees in the right direction over the relationship between pension contributions and tax relief after A-Day next year

Broken promise

Peter Legg (Money Marketing, last week) brought back memories of my schooldays trying to cram the poetry of Alexander Pope. “A little learning is a dangerous thing; drink deep or taste not the Pierian spring: there shallow draughts intoxicate the brain, and drinking largely sobers us again.” Peter forecasts the end of standard tax avoidance […]

A clear picture

Our panel of experts look at the implications of selling PTA under Icob and Cob rules and the ABI’s proposed changes to CI

Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.


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