AIB Govett is changing the investment remit on its Monthly Income Oeic sub-fund, writes James Thorne...
AIB Govett is changing the investment remit on its Monthly Income Oeic sub-fund, writes James Thorneley.
Historically, the £11m portfolio was invested 55% in UK equities and 45% in emerging market government debt.
Recently the group has found it increasingly hard to maintain the 8% yield offered by the fund, by investing in emerging market debt, according to Matt Hudson a fund manager at AIB Govett.
He said: "It used to be the case that Turkish debt offered a high yield but as the paper's credit rating improves the level of yield declines."
He added it had been decided to reduce the fund's exposure to debt and begin investing in high yielding shares from split capital trusts.
The fund will retain a 20% weighting in fixed interest securities but this will mainly be sterling corporate bonds. A larger proportion of the remaining 80% of the portfolio will be invested in shares of splits.
Hudson said: "We are big fans of the splits market and this should help us to increase diversification in the portfolio.
"In addition, although the predominant aim of the fund is to offer a high yield, we hope the split shares will provide investors with some capital upside."
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