View more on these topics

Taking stock

Schroder income maximiser is an interesting proposition with a mouth-watering yield. It aims to generate an income of about 6-7 per cent (net of charges) which is distributed quarterly.

The fund will invest in a portfolio of the UK value team’s 40-50 best blue-chip stock ideas coupled with an overlay strategy using covered call options.

A call option gives the buyer of the option the right to buy a fixed amount of stock from Schroders at a fixed price and date in the future (usually three months). The reason why it is a covered call option is because it is written on stock which is already owned in the portfolio. Lead manager Richard Lloyd writes a call option on each stock in the portfolio and sells it to a third party for a premium. It is this premium which enhances the yield on the portfolio.

By offering an income that is higher than the market, the trade-off is that the upside on the stocks is capped at around 8-14 per cent per quarter depending on market conditions. Therefore, the fund will not benefit from stocks which grow by more than their capped amount.

If markets are flat or falling, a fund like this should outperform. In rising markets, this fund may underperform trad-itional equity income funds. Buying a fund like this will depend very much on how important income is over capital growth in an investors’ portfolio.


Driving forces for better CI definitions

Earlier this month, the ABI’s critical-illness working party announced that the definitions of claimable conditions should be tightened to make them “future proof”. There will be further consultation during the year to finalise the new definitions. It looks likes Alzheimer’s disease and HIV transmitted through non-sexual activity will be added to the list of claimable conditions.

Q2 Isa sales down 10 per cent

The AITC says quarter two investment trust Isa sales were down 10 per cent on last year from 21.7m to 19.6m. Global growth accounted for the highest proportion of Isa sales by sector followed by UK growth and income. The average investment by regular savers was 152 per month, while the average lump sum investment […]

Chubby cats get the cream

The tax changes that will come into force on April 6, 2006 were designed to achieve a number of outcomes, one of which was to apply retrospective taxes to what the Government regards as the excessive pension savings accumulated by many so-called fat cats.

Friends Provident appoints Ian Jeffries as head of protection marketing

Friends Provident appoints Ian Jefferies as head of protection marketing, effective from September 2005.Jeffries takes over from Peter Hamilton, who moves to Zurich’s protection team, as reported in Money Marketing.Jeffries, who has been at Friends Prov for nearly twenty years will amongs other responsibilities be developing the protection proposition including the management of the proposition […]

Rise of the machines

Head of Sustainable Investing at Royal London Asset Management, Mike Fox, looks at the case for including artificial intelligence within a sustainable investment strategy. Read the article in full here The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm