A new European income fund of funds, to be managed by Sheffield-based Integrity Fund Managers, will launch on 7 July with a high yield remit.
The new Elite Integrity European Income fund is designed to fill a gap in the equity income sector, according to its manager, Colin Fogwill, the owner of Fogwill & Jones Asset Management, which does business as Integrity.
His new fund will sit in the IMA Europe Ex-UK sector, “even though the sector is a growth sector and we are an income fund,” says Fogwill, who notes the IMA has yet to introduce a Europe Ex-UK income category.
The fund will make use of the Elite third party fund management arm of WAY Fund Managers.
Initially, the Elite Integrity European Income fund will invest in just five funds, two of which are based in the UK, and also will be relatively (20%) cash-heavy, Fogwill says.
The five funds in Fogwell's starting line-up, which will carry roughly equal weighting, will be: Newton European Higher Income fund, Resolution Argonaut European Income fund, Schroder European Equity Yield fund, Parvest European Dividend fund and ABN Amro Europe High Dividend B Income fund.
Eventually, Fogwill says he will aim for a 50/50 mix of continental and UK-based funds.
"We will be deliberately using funds people here have never heard of,” he says.
“In Europe you have a better chance of achieving outperformance because the market is not as well researched as in the UK.”
Fogwill also believes European equity income fund managers have longer track records than their UK counterparts, which he says “will give the fund an advantage over other European equity income funds”.
Another objective of Fogwill’s fund of funds will be to spread its investments across many different countries, industries and equities, in order to reduce risk, Fogwill says.
The initial charge is 5.25% and there is a 1.5% annual management charge. The fund can be used for lump sum, regular savings and ISA transfers with a minimum investment of £3,000. The additional investment minimum is £1,000, with regular premiums of £100 a month.
During its 14 day initial offer period, investors in Fogwill’s fund of funds can take advantage of a fixed price of 100p. This means that if the fund’s price changes during this time, their investment would be unaffected.IFAonline
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