Rathbones has expanded its Sicav suite with the launch of a new offshore Income fund.
With a master fund already in UK operation, this addition aims to entice investors based in continental Europe. Initially, the fund will focus distribution in Belgium, Ireland, Spain and France, and be domiciled in Luxembourg.
It will invest via a master-feeder structure into the Rathbone Income fund, managed by Carl Stick and supported by the Rathbone income team, which includes Elizabeth Davis and Kate Pettem.
Forming part of Rathbones’ Sicav umbrella unveiled in May, the Rathbone Income fund offshore feeder will be available from October, subject to regulatory approval. Retail investors will be the main target audience, through financial advisers, life companies and Qrops providers.
Sterling and euro share classes will be immediately available, with the facility to create dollar share classes if demand is sufficient. The annual management charge has been fixed at 0.75 per cent.
Income is something many investors want, but finding quality yield is becoming harder. Many European government bond yields are negative, property funds remain in a state of flux and cash deposits have been hopeless for many years.
Although markets have reacted positively post-Brexit, there is still the underlying sense that tougher times are on the horizon. Many view the continent as risky at the moment, with a great deal of uncertainty surrounding future operations amid the UK’s impending departure.
Although investors should not rely on past performance, to ignore it completely could be negligent. Rathbones’ existing Income fund has outperformed the IA UK All Companies and FTSE All Share indices consistently over the past 10 years.
This should provide a layer of confidence for those eyeing up the new fund, particularly as Mr Stick will mimic this approach for the offshore edition. Non-domiciled investors will unquestionably be attracted to have access to what appears to be a tried and tested approach. Large-caps dominate the current portfolio including companies such as AstraZeneca and British American Tobacco. Although the mid- and small-cap areas are catered for, the solidity of large blue chip companies could be preferred by investors waiting for a substantial amount of dust to settle.