Aberdeen to launch Latin American income trust

Aberdeen is to launch an income-orientated Latin American investment trust for its emerging market stars Citywire A-rated Devan Kaloo and Brett Diment.

The fund is intended to run as a sister mandate to A-rated Hugh Young’s successful listed Aberdeen Asian Income trust.

Kaloo and Diment, the company’s head of emerging market bonds, will target an initial annual dividend of 4.25% and said they expect this to grow over time. The trust will launch with an initial 60/40% split between equities and sovereign bonds.

Diment said: ‘From a fixed income perspective, Latin American economies have weathered the global financial crisis well and are not burdened by the huge debt levels and imbalances of their so-called developed world peers.

‘Yet the yields available in the region’s fixed income markets remain at a premium to those offered by fundamentally weaker G-7 nation bonds.’

Aberdeen said that the fund would target second tier, domestic orientated businesses benefitting from increasing consumer spending. Retailers, banks and drinks companies were currently of particular interest. The company will publish a prospectus in July.