Hawksmoor Investment Management says global equity income is the single biggest theme in its multi-manager Vanbrugh fund. The firm backs funds that focus on strong and dependable companies with aboveaverage yields, particularly as investors become less enthusiastic about chasing higher-risk areas.
Chief investment officer Richard Scott says yields from firms in global equity income funds are higher than government bond yields and higher than the firms’ own bonds in some cases, creating anomalies which provide good investment opportunities.
Anomalies also existed in the area of convertibles when Hawksmoor invested in February 2009 but it has recently sold out of the JPM global convertibles bond fund because it is behaving more like equities than bonds.
Scott says: “When we invested in convertibles in February 2009, it had been smashed as an asset class. Many convertibles were held by hedge funds and banks who became forced sellers. The yields had the potential for an equity kicker because you have the right to convert from bonds to shares. Convertible prices have since rallied, so we have moved money into more diverse areas.”