The fund will be managed by River Road Asset Management, the US firm acquired by Aviva Investors in early 2010. It will mirror River Road’s existing Dividend All-Cap Value Strategy “as closely as possible” and aim to deliver a dividend yield that is 1.5% higher than the Russell 3000 Value Index.
The DAV strategy, launched in October 2003, currently has around half its assets in large caps, a third in mid caps and the rest in small caps. Aviva Investors says it returned 20.20% in 2010.
“We are bringing this expertise to our UK clients at a time where investors are moving back into developed market equities and the ongoing improvement in the health of the US economy, low interest rates and a cheap dollar continue to propel US equities higher,” said John Clougherty, chief executive of Aviva Investors UK Fund Services.
“However, not many investors have yet realised the potential of income plays. Since the beginning of this year, 117 companies in the S&P 500 Index have initiated or increased their dividends to a record-breaking US $16.6 billion.
“Those dividends should provide significant support for portfolios in the face of greater market volatility – and reinvested, underpin attractive long-term returns.”
The fund will be managed by River Road AM founding member Henry W Sanders III.
