Kames Capital has launched a Dublin-domiciled fund, which targets an annual income of 5 per cent paid monthly to sit alongside its pre-existing UK strategy.
The Kames Global Diversified Income fund also aims to generate total returns of between 7 per cent and 8 per cent after fees over the medium term of three to five years through strategy top-down macroeconomic views with bottom-up stock selection.
The fund will typically hold between 200 to 300 instruments, and will invest in a variety of assets including investment grade and high-yield bonds, global equities, listed property and specialist income – including listed infrastructure and renewables.
It will be managed by Vincent McEntegart, from Kames’ multi-asset team, who runs the successful UK version of the fund.
The product will be available in the UK, Austria, Belgium, Germany, Guernsey, Ireland, Italy, Jersey, Luxembourg, Malta, Netherlands, Spain, Sweden and Switzerland.
Its base currency will be Euro, but there will also be US Dollar, Sterling, Swiss Franc and Swedish Krona share classes.
The unveiling of the fund came just seven days after the launch of the Kames Global Sustainable Equity Fund managed by Craig Bonthron and Neil Goddin, and then supported by Ryan Smith, head of governance and ethical research at the fund house.
Provider view
Scott Jamieson, head of multi-asset investing at Kames Capital, said: “Demand for multi-asset products is increasing as investors look for funds that offer a robust and proven asset allocation process.”
“Our highly experienced Multi-Asset Group have a proven income-generating ability demonstrated by the success of our existing UK domiciled, Kames Diversified Income fund, which has a historic yield of 5.61 per cent and has achieved a total return of 14.35 per cent since launch in February 2014. We will aim to utilise this expertise for the Global Diversified Income Fund.”
Adviser view
Stefan Fura, director at Leicester based Furnley House, said: “It seems to me that quite a lot of asset mangers are coming out with global diversified income funds in recent times. It is difficult to maintain the yield with diversification.
“Income funds are a necessity now more than ever with rise in the number of people going through the decumulation stage. The AMC [annual managment charge] comes across as quite competitive for a diversified fund, but the cost of the fund is not the be all and end all.”
“We have a structured investment process. Yes we look at the cost and the past performance of the fund, but we also look at the risk levels and compare the funds to other global diversified income funds and global equity funds.”
Charges
AMC of 0.55 per cent.
Verdict
There has been a notable spike in the number of global diversified funds for income in the wake of the pension reform, which has unleashed pensioners from the shackles of annuities and enables them to explore other avenues for income at retirement. Heightened competition has seen the cost of these products plummet. Here, the AMC is notably competitive for a fund that adopts a diversified strategy. However, as Mr Fura quite rightly mentions, cost is just one of a number of different facets in an effective due-diligence process. But the stellar performance achieved by Mr McEntegart, who also manages the firm’s pre-existing UK version of the fund, will go some way in reassuring investors that their money will be good hands.
