BNY Mellon will launch a Global Infrastructure Income fund aiming to achieve a yield of 6 per cent a year.
The product is called the the Boston Company Global Infrastructure Income Fund and will be managed by Jim Lydotes and Brock Campbell. The Boston Company is a division of BNY Mellon.
The managers run a similar fund in the US market already and the American version has achieved a yield of around 6 per cent a year since launch, which the new fund will aim to mirror.
The fund will invest in a portfolio of between 20 and 40 stocks including traditional infrastructure sectors such as transport, energy and utilities as well as non-traditional communication and social sectors such as satellites, hospitals and senior care homes.
Fergus McCarthy, head of UK and Ireland intermediary distribution at BNY Mellon Investment Management, said: "The lingering low interest rate environment is creating the need for viable, income generating solutions to take the place of more traditional asset classes.
"This fund is a concentrated, high-conviction global equity portfolio that aims to deliver a high yield with significantly less volatility and lower drawdown.
"Given The Boston Company’s expertise in thematic investing, as well as the existing strategy’s strong seven year track record, Jim and the investment team are extremely well placed to manage this fund."
Over the past three years, the US fund has returned 7.4 per cent net of fees compared to its benchmark, the S&P Global Infrastructure UDS Hedged index, which has returned 5.6 per cent.
Darius McDermott, managing director at Chelsea Financial Services, said: "Well it is a broadening of the offering available UK investors within the BNY group. There has been a trend in the last three years in this infrastructure space at launching funds so only time will tell which are the better offerings.
"I am not familiar with the track record of The Boston Company team in this space but the yield does look attractive."
david.thorpe@ft.com
