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Integrity Fund Managers is poised to launch a high-yielding European equity income fund of funds for the UK retail market.

The fund, which goes live on 7 July, aims to generate a yield of 4.8 per cent.

The portfolio will be split down the middle, with half invested in UK-based funds and the remainder in continental European fund managers.

Manager Colin Fogwill said the firm believed this was the first of such funds to be open to UK investors.

"Advisers wanting a solid European equity income fund are not exactly spoiled for choice, hence our decision to focus on this niche area of the equity income sector," he said.

"With the integration that is taking place within Europe and the continuing development of the emerging European countries, publicly quoted companies are best placed to cash in on the growth that is also taking place, which will in turn increase their share price and their dividend stream."

Initially the portfolio will comprise just six underlying funds, including Newton's £34.1m European Higher Income and Resolution Argonaut's £456.8m European Income funds.

At launch, the fund is expected to have 15 per cent exposure to France, 12 per cent in Italy and 9 per cent in UK stocks. The rest of the portfolio includes exposure to Germany, the Netherlands, Greece, Sweden, Spain, Norway and Switzerland.

Financials will account for nearly 30 per cent of the portfolio, while consumer staples will make up just over 12 per cent and telecoms slightly more than 8 per cent.

Cash is tipped to be 20 per cent. Mr Fogwill explained the fund would initially have a high cash weighting "due to current market conditions".

However, this would allow him to take advantage of opportunities as and when they arose, the manager added.

Boutique firm Integrity, which trades under the name Fogwill & Jones Asset Management, will work alongside Elite Fund Administration, the third-party fund management arm of Way Fund Managers, which takes on the role of ACD.

After going live next week, the fund will have a 14-day initial offer period, with units carrying a fixed price of 100p.

Fund facts:

Initial charge: 5.25 per cent

AMC: 1.5 per cent

Minimum investment: £3000