By Jane Wallace Threadneedle Investments will launch a packaged income pro-duct which yields 6.1% gr...
By Jane Wallace
Threadneedle Investments will launch a packaged income pro-duct which yields 6.1% gross on 4 October
The 3-IN-1 Monthly Income Solution comprises three funds: the High Yield Bond Fund, which yields 8.75%; and the Monthly Extra Income Fund, yielding 4.2%, which are also launched on 4 October; and the existing Monthly Income fund, yielding 2.8
The Solution will be 50% invested in High Yield Bond, 25% in both Monthly Extra Income and Monthly Income. It will therefore be about 40% weighted towards equities and 60% invested in bonds. It is available either as an Isa or straight Oeic investment
David Sachon, retail managing director at Threadneedle, said: "Investors and their advisers can use each income fund to build their own selection of funds but to simplify the decision we have put together a portfolio mix
"We believe this mix will be very attractive, particularly to retired people who want a decent income today but also need an income that can grow in future years and the opportunity for capital gain as well
During the offer period, which lasts until 5 November, there is a 0.75% discount on the initial charge of 3.75% on all three individual funds, as well as on the package. The package and the funds share the same commission and charging structure. There is an annual management fee of 1.25%, taken from capital, and commission for IFAs of 3% initial and 0.5% renewal. Monthly Extra Income is invested 65% in equities, managed by Steve Thornber, and 35% in bonds, managed by Ted Bacon
The model portfolio comprises 30% corporate bonds, 3% gilts and 2% cash. The largest equity weighting in the portfolio by sector are financials on 15% and cyclical services on 12%. The next largest sectors are resources and non-cyclical consumer stocks, weighted at 8% each. The top five equity holdings are likely to be BT on 3.7%, Shell on 2.7%, BP Amoco on 2.6%, GlaxoWellcome on 2.2% and HSBC on 1.9
High Yield Bond is managed by Barry Whitman and will be 80% invested in high yield sterling corporate debt or other high yield debt hedged back into sterling. The remainder will be split between dollar or Euro-denominated high yield debt, which will be issued by UK or European companies, or multinationals. The average credit rating of fund will be below BBB, which is below investment grade
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till