Former M&G manager Alex Odd has returned to the investment industry with the launch of his own firm and UK equity income fund.
Mr Odd, who ran M&G’s £1.4bn Dividend fund from 2010 until 2013, has founded Odd Asset Management and launched the VT Odd Real Income vehicle towards the end of 2015.
The manager said he was looking to compete in the “very competitive” Investment Association UK Equity Income sector by focusing specifically on increasing levels of income.
Mr Odd, who favours “sensibly financed” companies, warned a focus on short-term returns had in some cases led to managers in the sector sacrificing income.
“A lot of marketing is done on total return performance. Because of that, fund managers are heavily incentivised to maximise short-term total returns, and with that [they] can sometimes sacrifice income,” he said.
The fund, which targets 30 to 50 “broadly equally weighted” holdings each making up between 1.5 and 3 per cent, looks to boost the purchasing power of clients’ income over time to keep up with inflation.
Mr Odd also thought his focus on equally weighting stocks, as well as a decision to diversify across different industries, would protect the portfolio.
The total ongoing cost of the fund is capped at its current level of 1 per cent, with the manager suggesting this would fall once the vehicle achieves greater scale.
He added that Odd Asset Management is considering approaches from other mangers regarding a possible expansion of the company and product range.
