Allianz Global Investors plans to launch the Allianz RCM European Equity Income fund with versions available in Europe and the UK, pending regulatory approvals.
The fund will invest in blue chip companies, aiming for a high but sustainable level of income.
Valuations for equities are low by historic standards and are discounting bad news including dividend cuts, according to Neil Dwane, CIO Europe, RCM.
"Given the incredibly challenging outlook for world markets, we believe that equities will yield better returns than cash or government debt as bond issuance and money are printed in huge quantities."
He expects European blue chips to offer 'extremely attractive and well covered' dividend yields.
The Continent currently offers three times as many high-yielding stocks and greater dividend cover than the UK while European companies also have a higher free cashflow than the global average, says Dwane.
"As companies' growth slows, reflecting the economic recession, these companies and their dividends will become an ever greater part of shareholders' return and therefore even more important to investors in the years ahead, especially as reflationary policies get to work," he adds.
UK advisers can call: 0800 84 84 94 for more information.
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