This new fund launches on 15 October and will be managed by Nick Brind who recently joined HIM (Hiscox Investment Management). He comes with 15 years experience investing in the financial sector and this new fund will primarily focus here with exposure to the banks, insurance and real estate.
This is a global fund with exposure to the UK, Europe, Asia, US and other parts of the world.
At launch it is also expected to have around 35% in corporate bonds with the remainder in global equities.
The fund's target yield at launch is in the region of 6% (net, variable and not guaranteed) which will be paid quarterly in January, April, July and October.
Nick Brind’s belief is that investors are increasingly demanding a higher level of income in the current low interest rate environment, and financial stocks are currently offering attractive yields with significant recovery potential. The aim of this fund is to capture best of these opportunities.
The fund has an annual management charge of 1.25% and an additional performance fee of 10% of any outperformance of the Dow Jones STOXX Financial Index (please refer to key features for additional information). Investors should note that performance fees can make these types of funds expensive and we argue that any active fund manager should be able to generate solid outperformance over the longer term.
While Hiscox are specialists in managing financial funds we would like to see how Nick Brind performs on this new fund. The fund’s target yield of 6% may look attractive, but the risk is that Hiscox may have set too high a target. As the financial sector recovers, yields could potentially drop and Nick Brind may be forced to chase high yielding stocks at the expense of capital growth potential. This fund will not be going on the Wealth 150 list of our favourite funds in each sector at launch.
Meera Patel, Senior Analyst
>> Key Features of the Hiscox Investment Management Income Fund
>> Simplified Prospectus for the Hiscox Investment Management Income Fund
