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Sutherland to run low-risk income fund from SLI

Standard Life Investments is rolling out a low-risk income fund seeking a target yield of 6.5 to 7 per cent through a diverse portfolio of fixedinterest securities.

The select income fund, which has been awarded an AA rating from Standard & Poor&#39s, will be managed by Andrew Sutherland, who runs SLI&#39s higher-income and corporate bond funds.

He will seek to invest in a portfolio of investment grade and sub-investment grade bonds, with around 80 per cent of the fund invested in BBB or single A-rated securities and the remainder in high yield.

The fund will hold around 70 to 75 bonds and Sutherland will be free from most investment constraints as he has to meet only a loose internal benchmark.

Charges are 3 per cent initial and 0.95 per cent annual. Commission is 4 per cent from May 1 to July 15, after which it switches to 3 per cent. Trail is 0.25 per cent.

Head of global fixed income Rod Paris says: “The fund will suit investors looking for higher yields than our corporate bond funds but without the degree of risk carried by the higher-income fund.”

Chelsea Financial Services managing director Darius McDermott says: “Sutherland has a good reputation and excellent track record. We would be interested in any fund of his – especially one with such reasonable charges.”

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