Woolwich Plan Managers has teamed up with Mor-ley Fund Management to launch a global distrib-ution bond.
The companies have designed the fund to deliver a stable and high level of income.
The fund aims to offer a gross income of 7 per cent a year or 2.5 per cent above the Bank of Eng-land base rate.
It will be tied to a new fund managed by Morley which will actively handle a balanced portfolio, with a mix of 60 per cent equ-ities and 40 per cent bonds. Equities will be invested in about 100 lower-risk, higher-yielding global stocks from the MSCI universe.
The bond portfolio will be invested in global convertible bonds, convertible preference shares and cash, with bonds biased towards investment-grade issues.
Morley lead investment manager Tom Wills says: “By using the options market, we can generate an income from each stock and sell excess upside to provide a downside cushion which is ideal for lower-risk investors.”