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Schroders launches high income fund-of-funds

Robin Stoakley
Robin Stoakley

Schroders has announced the launch of a fund-of-funds vehicle investing in the Schroder maximiser and Schroder fixed income unit trusts.

The managed monthly high income fund will be managed by both Thomas See, head of structured fund management, and Gareth Isaac, senior fixed income portfolio manager.

The fund carries a potential yield of 5.5 per cent per annum and has an asset allocation divided evenly between equities and fixed income.

Thomas See says: “This is a fund that pays a higher monthly yield from four well-diversified sources of income, several asset classes and multiple geographies, despite a difficult yield environment.

“By tapping into eight of Schroders’ actively managed investment strategies, we can help reduce the risk of relying on the performance of any single fund or strategy, while creating a diversified product with less volatility than a pure equity investment.”

On the equity side, the fund will have exposure to Schroder income maximiser, Schroder Asian income maximiser, Schroder ISF European dividend maximiser and Schroder global property income maximiser funds.

For fixed income, the exposure will be to the Schroder sterling broad market, Schroder ISF global high yield, Schroder strategic bond and Schroder absolute return bond funds.

Schroders managing director of UK intermediary Robin Stoakley says: “Given interest rates remain low and returns from cash after inflation can be negative, it’s difficult to find credible investments paying an attractive yield.

“The fund offers investors low volatility, an attractive monthly income stream and the opportunity of some capital growth over the long term.”

According to Schroders all annual management charges for the individual underlying funds will be rebated back to the fund-of-funds, allowing just one single layer of fees to apply.

The fund will sit in the new IMA mixed investment 20-60 per cent shares sector. The new launch will be available in two share classes, a clean fee “Z” class and an “A” class with annual management charges of 1.25 per cent and 0.625 per cent, respectively.

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