Discretionary fund manager (DFM) Quilter has launched a global income fund as part of its model portfolio service ahead of its merger with Cheviot.
The Global Income Strategy is the discretionary fund manager’s eighth fund within its model portfolio range.
Targeting a yield of 4.1%, it will invest primarily in global equities and global corporate bonds.
It will sit between the Income and Balanced funds, which have a maximum volatility boundary of 13% and 15% respectively.
The fund will contain around 18-20 holdings and will explore trends such as dividend growth in Asia and emerging markets, as well as employing a shorter term tactical strategy within continental Europe.
Julian Menges (pictured), joint head of managed portfolio service and vice president said the aim was to provide a diversified multi-asset portfolio without gilts.
‘The UK credit rating is at risk of a downgrade, inflation remains stubbornly high and investors are suffering erosion in real terms,’ he said. ‘Investors in gilts are going to suffer significant risk of capital when yields normalise. Traditional investors in the UK market have been focused on UK equity income but there’s now greater opportunity for accessing quality companies overseas. They are now paying good dividends but there is also dividend growth.’
Menges added that the need for income in this low interest rate environment would stay with investors for years to come.
The DFM has £8.2 billion under management, with around half of that in collectives.